Anyfi raises $1.5M to build virtual hotspot networks

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Anyfi Networks is now $1.5 million closer to building the big Wi-Fi offload networks of carriers’ dreams. The Swedish startup has developed a tunneling technology that can turn any private access point into a mobile data “small cell,” which would allow operators to easily build hybrid cellular-Wi-Fi networks like the ones deployed by France’s Free Mobile and by Japan’s Softbank.

Industrifonden, a fund that specializes in Swedish startups, led the round with a 9 million Swedish kroner (US $1.37 million) investment, while Animi’s angel investors are kicking in the remaining 1 million kroner. Before the current infusion, Anyfi had raised “less than $1 million” in seed funding, according to CEO Björn Smedman.

Anyfi founder and CEO Björn Smedman

Based in Malmö, Anyfi has developed a technology that breaks the tie between the physical radio and the Wi-Fi network, spawning virtual hotspots on what otherwise be a private wireless LAN. To the customer, a phone or device links to those hotspots automatically just as they would to their home networks. Smedman said that Anyfi is tunneling authentication protocols over the Internet back to the customer’s residential Wi-Fi gateway. From the device’s point of view, it’s at home. From the access point’s vantage point, it’s running two separate networks, one private and one public.

Carriers such as Free Mobile have managed to achieve the same setup by providing both the mobile and Wi-Fi infrastructure, but most carriers don’t have that luxury. Industry groups are trying to standardize similar technologies through the Hotspot 2.0 and Next Generation Hotspot initiatives, but it will take years before all of the pieces are in place.

Anyfi is promising a solution that carriers can use today to broker deals with hotspot providers and residential broadband operators. That will allow them to creating massive interlinked Wi-Fi networks with no hardware upgrades, no special handset clients and no integration headaches, Smedman said. The company is in trials with two operators, one of which is North America.

Anyfi isn’t the only Wi-Fi networking startup getting attention. Multi-radio mesh networking app developer Open Garden just closed a $2.2 million seed round. Meanwhile Devicescape, which has created its own virtual hotspot network using open Wi-Fi, has started getting a lot of attention from carriers and device makers, including Bouygues Telecom, Republic Wireless and Intel(s intc).

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