VentureBeat

(Updated, corrected investor information)

FON, the Madrid, Spain company that offers routers to people that FON members can share if they want, has raised a second round of funding.

It has received $13M from existing investors Index Ventures and Google, and from four undisclosed non-US investors (the company says names will be announced at a later date). Its total funding is now $35 million, and comes a time when a raft of competitors have entered the market, such as Whisher, a Benchmark Capital-backed company, which targets FON directly, and other players that overlap with FON, such as Meraki.

FON says it has a total of 320,000 members and more than 120,000 WiFi hot spots that those members can access. In the US, more than 60,000 hot spots have gone up over the past two months, serving 45,000 members. Joanna Rees is chief executive of FON USA (Update: The company says Joanna is an early investor in FON too).

Here’s a post by Martin Varsavsky, the CEO and founder, announcing the funding news.

Honestly, we never got FON, the company that sells a WiFi router so that you can share your WiFi with others.

FON claims 50,000 nodes, and that it is the “largest WiFi network in the world,” so it appears to be having some traction.

Whisher is a new Spanish start-up flogging a similar model — but its offering may be more palatable than FON’s. Whisher has just raised an undisclosed amount of funding from Benchmark Europe and SwissCom. This news was supposed to be “embargoed” until Tuesday morning’s Demo conference opened, which is the rule for companies like Whisher presenting there. However, the news has already been broken by the habitual embargo-breaker, Erick Schonfeld (got to love his chutzpah) and elsewhere (a good summary of all the latest WiFi offerings, btw), so we’re weighing in too.

Stepping back, the FON idea is that you share your WiFi with others, and they’ll share with you • a great help when you’re on the road and need a connection for free.

But practically speaking, this is a tough sell. You’ve got to buy the router first, and in today’s rushed world, buying another router in hopes that you might find someone else to share with down the line — well, it doesn’t seem to be high on our priority list. Increasingly, there are muni WiFi sites, and if you’re desperate, there are free WiFi cafes; we know at least one in each major town we visit here in Silicon alley. And there are EVDO cards, too.

So along comes Whisher, which basically does the same thing as FON, but without requiring you to buy the $29.95 hardware box. There’s some emnity here, too, because Whisher is run by Ferran Moreno, who left FON, apparently over a split with FON CEO Martin Varsavsky. You do download a free software. This lets you tap into any free WiFi hotspot, or into the private WiFi network of participating members. Once there, Whisher provides other social networking features • for example IM, file-sharing and information about the locale you’re visiting and the users there.

So how does it plan to make money? Whisher, unlike Fon, wants to rely on advertising. By getting users to chat and interact at a local WiFi connection, Whisher hopes to let advertisers target the users. If you’re near a MacDonalds, for example, the fast-food chain can offer you a discount to lure you over.

The investment from Benchmark Capital is led by Klaus Hommels, who was an early investor in Skype, and who says he sees the same viral possibilities in Whisher.

(Competitor FON, notably, is funded by Skype, along with Google and Sequoia Capital)

Ferran Moreno, founder and CEO, tells VentureBeat he’s most proud of the company’s embedded browser • which lets Whisher control the experience, updating it as needed.

The IM service is integrated with Jabber, which allows you IM with anyone else on the network, regardless of their particular IM service.

The file-sharing is noteworthy too. You leave the files on the WiFi network, so that anyone passing by can have access to them.

Right now, the Whisher’s Windows version is working better than its Mac and Linux versions, Moreno said. VentureBeat was unable to login to test the product.