Chinese public transit wifi app nets $16M+ series A backed by Baidu

Chinese search giant Baidu took another step into the world of transportation this week as the lead investor in the series A funding round of 16WiFi. The round of “over RMB 100 million” (US$16 million) was also funded by China’s United Electronics Co. (not to be confused with a US-based company of the same name).

16WiFi is a hardware interface and mobile app that integrate to bring wifi service to China’s public transit systems. A hardware dongle on the bus itself captures 3G and 4G network service from China’s telecoms and converts that into a wifi signal which users can then access by logging in through 16WiFi’s client mobile app. The startup was founded jointly by Colorful Group, Beijing Mobile, and Huawei back in 2011, and in 2013 it was installed on 12,000 buses in Beijing. It has since been rolled out in several other cities including Shanghai and Nanjing, with agreements in place to bring it to many more. It is also installed on a couple of subway lines.

16WiFi CEO Qiu Chaomin says that now with the support of Baidu, 16WiFi will be able to speed its expansion into new areas. The company’s goal is to enable China’s public transit to get connected to wifi without the need for government investment.

As far as how the company plans to turn a profit, Qiu says many models are being considered: everything from ads to games to O2O platforms. But first and foremost he believes that the wifi needs to remain free to encourage adoption and achieve scale, so it sounds like revenues aren’t an area of immediate concern.

Unsurprisingly, Baidu rivals Alibaba and Tencent also have invested in similar public wifi apps. Nearly half of China’s 1.3 billion mobile subscribers have a 3G or 4G subscription, but complaints about high data rates have many subscribers hopping on free wifi whenever they can find a connection, so consumers are likely to welcome 16WiFi and other free wifi operators with open arms.

(Source: Sina Tech)