Fon, a Spanish startup hoping to build "the world's largest wireless community", has raised $9.5 million in a third round of funding, according to TechCrunch.
Coral Capital Management led the round, with participation from British Telecom, Google, Allen & Co., founder Martin Varsavsky's Jazzya and Joi Ito's Digital Garage. Varsavsky says he'll use the new funding to launch Fon in Russia, and to release a new version of the company's Fonera router.
We covered the company last October, when British Telecom joined Google as a Fon investor. It's a cool idea: After installing a Fon wireless router, you can open up your network to other Fon users in exchange for free access to other routers when you're traveling, or you can charge for access and receive 50 percent of the proceeds. But it's still not clear whether the company is making much money, since it appears to be giving the routers away for free, and the most interesting part of Fon's model also involves free wireless. (A startup called Meraki is also trying to create a free wireless network, in this case one that envelops San Francisco.)
It's worth noting that British Telecom and Google may not see Fon as a moneymaker, but as a way to promote their own offerings. Sequoia Capital, a previous Fon investor that's usually more interested in profit, didn't participate in the current round.