2008 11
Fon raises $9.5 million in tough markets
Published by MartinVarsavsky.net in Internet & Technology with No Comments
We are happy to report that at Fon we have raised $9.5 million in a C round. Our current valuation which unfortunately I can´t disclosed has been the best valuation so far. This does not mean that we were not hurt by current market conditions which are pretty bad for start ups (Fon was founded in February 2006). Our leading investor in the round was a US Venture Capital arm of Sistema, Russia´s leading telco but our usual suspects, Google, British Telecom, Digital Garage and of course your blog writer participated in the round.
What are we going to do with the money? Launch Fon in Russia, launch the Fonera 2.0 (the fonera that uploads and downloads stuff to and from the internet while you are doing something else with your laptop) and develop the fonera 802.11n for an end of the year launch.
Unfortunately we will also have to do all this spending less money because this market forces us to do so. We already cut losses at Fon from $1.3 million per month to $800K per month in the last half year and we achieved this through cost reductions, a great reduction in router subsidies and increased revenues with high margins. We plan to do more of the same in the future and my target is to be losing half a million per month by June and to break even by the end of 09. And yes I do know that I should not be telling any of these things because we are a private company but if this blog is of any value to entrepreneurs I believe I must share them with you.
Bottom line: tough market forces you to think harder about everything you do but we are very happy to have closed this C round.
Follow Martin Varsavsky on Twitter: twitter.com/martinvars
No Comments
Enrique Burgos on April 11, 2008 ·
Congratulations Martin for all your efforts to create a free wifi community!!
II’m proud to be a Fonero!
Sylvain on April 11, 2008 ·
Congratulation to you and your staff, Martin.
Emmanuel Chriqui on April 11, 2008 ·
Hi Martin,
..And yes I do know that I should not be telling any of these things because we are a private company but if this blog is of any value to entrepreneurs I believe I must share them with you..
IMO, those “things” and the rest of this blog, are interesting and valuable. What you write helps us understand what you consider important and what motivates you.In a way, it helps us understand who you are. That is the goal of blogging, no?
Yusuf Goolamabbas on April 11, 2008 ·
Martin, Would really love to see a 5 port GigE + Wireless-N Fonera. I want to use my La Fonera as a router first and then think of the WiFi community as secondary.
FON has the least number of ethernet ports today of any router in the market.
The approach of using La Fonera as a secondary router just means one has to worry about additional power drain, more cables
A Power over Ethernet PoE variant of La Fonera would also be great for in-building deployments
Paul RODTS on April 11, 2008 ·
Martin, good luck..!!!. and you are right to take very good care about this money…The (ice)bears are going to stay in the markets for another year…
FON is a great idea, we need you to keep focused (…no more cocktail parties for Martin the next months…)
…just joking…. 😉
Carlos on April 14, 2008 ·
Congrats martin
We have recently closed our first round and I can imagine how difficult it might have been considering the amount raised. But I disagree in the appreciation “tough markets”. After closing the round, and considering the complexity of the financial situation, I have to say that nowadays, there’s plenty of money available for VC and PE adventures….what’s missing are good ideas where to invest, and yours, my friend, is a good idea.
Abrazo y suerte
Carlos V.
David on April 15, 2008 ·
Hola Martin, gracias por compartir tus experiencias financieras con la comunidad.
Recientemente conocí una iniciativa de RedIRIS (red de datos académica) para el lanzamiento de una red de datos paralela a la red en producción, se llama PASITO y su principal objetivo es probar en una red WAN nuevos protocolos, productos, servicios.
Posiblemente sea interesante para tu Fonera 2.0 y servicios asociados.
salu2
miguel diez on October 9, 2008 ·
Martin;
We all now that IPOS and fund raising is only a business for the seller or fund raiser for that matter. I live in California and I am a little bit disconnected from my country Spain, however I still own Jazztel that I bought for $11 before 9/11 and now they are worth $0.17. Are you planning for FON another Jazztel… Nice job with the junk bonds.
Leave a Comment
You must be logged in to post a comment.
Gaston GA on April 11, 2008 ·
1st: Congratulations for your success on how you are managing the tough markets.
2nd: I hope you can achieve what you are planning to do and that you tell us the same if fon goes public ha ha haahah