VCs Dialing VoIP Startups

Venture dollars continue to flow into the Voice-over-IP start-ups. The latest company to raise big dollars is Blue Note Networks of Tewksbury, Massachussets. The VoIP software company snagged $15 million in series B funding from Commonwealth Capital and existing investors Fidelity Ventures and North Bridge Venture Partners.
Las week, TelTel, a Santa Clara-based start-up that hopes to become the SIP-based Skype-type service provider raised $8.8 million in Series A venture capital from no-name investors such as Purple Communications, Acorn Angels and Parawin Venture Capital. With over 1.5 million registered users and partnerships with service providers worldwide, TelTel claims it is the world’s largest SIP-based Internet telephony user community.
A few days ago I wrote about Tello, a company co-founded by Jeff Pulver, which had raised $5.5 million from the likes of Craig McCaw and former Apple CEO John Sculley. Michael Robertson, the founder of recently snagged $6 million in funding from Dawntreader Ventures.
The murky regulatory scenario, and the ultra-crowded landscape makes investing in VoIP start-ups clearly risky. Sure Skype managed to get $4.1 billion from eBay, but that’s a one-off deal, much like Yahoo buying Barring the Skype-sale, the exits in the VoIP sector have been few and far between. For instance, the only VoIP IPO, CBeyond is trading below its offering price of $12 a share.
Many industry insiders believe that the Vonage IPO and its after-offering performance will determine the future of VoIP, at least from a financial perspective. A bad IPO could chill the new investments in the entire segment. Nevertheless, the immense potential of VoIP as a transformative technology, continues to lure the VC investors.