Sequoia invests in Wi-Fi startup Meraki

Meraki Networks, the wireless mesh hardware and software startup that raised seed capital from Google and a handful of angels late last year, says it has raised $5 million in Series A funding, with Sequoia Capital leading this round of investment. We’ve been following the Mountain View, Calif.-based company closely as it has turned a project that originated as MIT Roofnet into a well funded startup.

Update: An interesting line in the company’s funding announcement is: “Meraki is also experimenting with groundbreaking ways to offer free Internet access to Meraki customers.” I asked CEO Sanjit Biswas for some clarification on this new idea, and Biswas wrote in an email:

“We found many of our networks are able to serve users for $1-$2/month per user, so we’re experimenting with different ways for operators to recover those costs while keeping access open. There are many different options, and we haven’t decided on a specific direction yet.”

Meraki has been selling its wireless 802.11b/g access point and mesh repeater, the Meraki Mini, for $49 and claims its products are already being used by 15,000 users in 25 countries. The hardware allows users to build a wireless mesh network or extend the range of a municipal network, for a low cost.

The company’s management software enables users like apartment complex owners or community builders to control the network through a web-hosted interface. The company also lists an outdoor ruggedized version of its Meraki Mini for $99.

Meraki built its hardware based on an open platform and the company had been encouraging users to tinker around and install their own software. But the hardware isn’t completely open source and the startup seems to have moved farther away from those open-source roots.

Google and Sequoia have invested in low-cost Wi-Fi hardware companies before, and both funded Spanish startup FON Wireless. Sequoia also previously invested in Ruckus Wireless, which sells hardware that can pull in muniFi mesh signals, among its other products. Last week Benchmark Capital-backed Spanish startup Whisher demoed its Wi-Fi sharing software.

There’s lots of startups aiming at this consumer Wi-Fi market, as the first generation of Wi-Fi mesh startups like Tropos have focused more on hardware for operator’s networks. Now as city-wide Wi-Fi networks are going up and broadband access is getting cheaper, consumers and communities are looking for alternative, cheap ways to access and manage broadband services, and startups are bringing us even more choices.