* VCs like VoIP companies
U.S. venture capital firms are betting heavily on VoIP.
In the first half of 2005, venture firms have invested more than $260 million in at least eight start-ups offering hardware, software or services for running voice communications over the Internet.
These figures are from the quarterly MoneyTree survey compiled by PricewaterhouseCoopers, Thomson Financial Venture Economics and the National Venture Capital Association.
The MoneyTree survey found that the venture capital industry has invested $5.257 billion in the overall networking industry – including hardware, software and telecom services – during the first half of 2005. The VoIP portion represents about 5% of the total network industry investment, which is a significant amount of a single technology.
The biggest VoIP deal so far this year was a $199 million investment in VoIP carrier Vonage. Vonage has raised a total of $393 million in six rounds of financing since the second quarter of 2001.
Other VoIP investments in 2005 include:
* $18 million invested in General Bandwidth, an Austin, Texas manufacturer of telecommunications equipment that enables voice services across broadband Internet lines for residential and business customers. General Bandwidth’s G6 Universal Media Gateway is an open standards circuit-to-packet platform that is deployed in a service provider’s switching office. It enables voice communications between packet-based and circuit-based networks.
* $15 million investment in Teledvance Communications, a Louisville, Ky., provider of high-speed voice, data and video communications over the Internet. Teledvance’s VoIP platform can be enhanced with conferencing services, voice mail, Web hosting, unified messaging, fax and more. The service is geared toward small and midsize businesses.
* $10 million investment in SentitO Networks, an Acton, Mass., provider of carrier-class VoIP switching systems that allow for a gradual migration path from legacy systems to IP. SentitO’s Intelligent Voice Gateway is a scalable, intelligent voice services gateway designed for the edge of carrier and service provider networks. Built to deliver VoIP transport services, the gateway combines media gateway, call control and router technologies.
* $7.5 million investment in LiteScape Technologies, a Foster City, Calif., developer of enterprise software for IP telephony. LiteScape’s products extend interactive voice, text and image capabilities to telephones and other IP devices. The company’s products include OnCast, an IP telephony solution, and ServicePoint, a customer and employee self-service solutions.
* $6.3 million invested in Sipera Systems, a Richardson, Texas provider of security solutions for real-time IP applications such as VoIP, video and multimedia. Sipera Systems’ SaVoN family of products applies techniques such as anomaly detection and VoIP protocol analysis to protect VoIP networks. Sipera’s products will be available in late 2005.
* $4.4 million invested in LignUp, a Mountain View, Calif., provider of enterprise software that uses the Session Initiation Protocol (SIP) for voice applications and infrastructure. LignUp products include SIP-PBX, SIP-Centrex, voice mail, unified messaging and outbound calling. These applications run on the LignUp Communications Infrastructure, a standards-based software platform that supports Web services.
* $1.2 million invested in CrystalVoice Communications, a Santa Barbara, Calif., maker of enterprise voice communications software. CrystalVoice’s products include Remote Extension, Click-to-Talk and Interoffice Voice Trunking. These products allow clear, reliable voice communications to be transmitted over the Internet.
Kirk Walden, national director of venture capital research at PricewaterhouseCoopers, says venture capital firms are interested in VoIP because it is finally living up to its promises of lower costs.
“We all know that it’s cheaper to do VoIP than traditional voice,” Walden says. “Plus, there is some loosening of the purse strings at the corporate purchaser side of the market, which is driving VoIP sales to the enterprise.”
