Chinese app for stealing free wifi has 270M monthly active users, now worth $1B

Wifi Skeleton Key, an app for quickly connecting to wifi hotspots without a password or sign-in, has raised US$52 million in series A funding, according to QQ Tech. The investment came from Haitong Securities, Northern Light Venture Capital, and others. QQ Tech’s sources say the company gave up 5.2 percent equity in return, which, if true, puts the company’s valuation at around US$1 billion.

Wifi Skeleton Key (named WiFi万能钥匙 in Chinese) allows users to establish a connection to millions of hotspots across China without the need for credentials. It works very similar to Wifi Companion, a likeminded app that raised US$9.75 million in series A funding in December. All ChinaNet hotspots, of which there are 8 million littered throughout the country, are available to Wifi Skeleton Key users. Those hotspots are run by China Mobile, the world’s largest telecoms operator.

Crowdsourced logins

The app also crowdsources login credentials, so when one user logs into a hotspot, his or her credentials are added to the database so that everyone else on the app can also use that hotspot. Users cannot actually view these credentials so as to protect user data.

Wifi Skeleton Key boasts 270 million monthly active users, making it one of the most popular apps in the country. The company claims that makes it the third most popular app in China after Tencent’s duo, WeChat and QQ Messenger.

Similar apps for connecting to wifi and availing some free internet are popular in China, especially among users with high-end phones, according to app store and mobile search startup Wandoujia. In contrast, Wifi Companion has 18 million monthly active users.

Wifi is fairly ubiquitous in most of China’s major cities these days. The problem is that they are either password protected or let you connect and then require further input – usually personal information or a username and password that you don’t have. Even at Starbucks, users have to input their phone number to receive a PIN via text message to be able to access the web.

Running down the list of supposedly public wifi hotspots is a frustrating process of trial and error. Furthermore, inputting your phone number or personal info just to be able to download an app or send a message on WeChat can lead to spammy texts and even serious security threats.

Wifi Skeleton Key lets users bypass such threats, but some reports in Chinese media accused the app of having security risks of its own. Those media alleged Wifi Skeleton Key collected users’ private data without their knowledge and left those users vulnerable to hackers. Wifi Skeleton Key responded in February, calling the rumors slander and stating that the company collaborated with Baidu on a number of security measures.

Wifi Skeleton Key is available on Android, iOS, PC, and Mac.

(Source: QQ Tech)