Why IntelePeer Snagged $18 Million in Funding

IntelePeer is one of those startups that has little buzz but a lot of traction. Formerly known as VoEx, the San Mateo, Calif.-based company lacks the hype around, say, Ribbit, but it has been delivering on the Voice 2.0 promise of integrating voice with web and enterprise applications for a long time. And doing well — IntelePeer turned EBITDA positive in June and is on its way to revenues that will exceed $50 million in 2009.
That is one of the reasons the company was able to snag $18 million in Series C funding from Vantage Point Partners and previous investors including Kennet Venture Partners, NorthCap Partners and EDF Ventures. The new round is incredible because of its timing — though I am betting that the new investors are looking at the $105 million Ribbit exit and letting their imagination run wild. But then there aren’t many suckers like BT around anymore! The company has raised (including this round) a total of $35.5 million since its inception in 2003.
Thanks to its own voice peering fabric, IntelePeer is on its way to doing close to 7 billion minutes of voice traffic this year, Chairman and CEO Frank Fawzi told me yesterday. “We are a lot larger than Ribbit and Jajah by multiple times,” Fawzi quipped. Jajah is heading down the same path at IntelePeer and the two companies are poised to become fierce competitors — that is if Jajah makes it out on the other end of this downturn.
So why does IntelePeer need the money? “We only just turned EBDITA positive and we need to support our expansion,” Fawzi claimed. Of course, I never expected him to say that he was buying insurance — his investors wouldn’t like that. Plus, it’s prudent to take this money right now. As we all know, downturns are as unpredictable as the tornadoes in the Midwest — and leave just as much destruction in their wake.