Fonality Lands $12M Financing Round from Draper Fisher Jurvetson (DFJ)

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Fonality Lands $12M Financing Round from Draper Fisher Jurvetson (DFJ)

Fonality, a provider of IP-PBX systems based on Asterisk, has just secured a $12 million financing round led by Draper Fisher Jurvetson (DFJ) Growth Fund with participation from existing investor Intel Capital. Draper Fisher Jurvetson is a well known venture capital firm backing more than 600 companies including industry-changing companies such as Hotmail, Overture, Four11, Baidu, and fellow VoIP company, Skype.

I spoke with Fonality CFO Dan Rosenthal who explained that Fonality has had  16 successive quarters of growth, and that the main goal of this funding was to grow the distribution channel and accelerate growth. As part of the financing deal, DFJ will become part of Fonality's board. Dan said, "We're growing at a pretty good clip. Growth takes cash. We've got relationships with big partners such as Dell,  PCMall coming down the line. In order to really accelerate our growth we want to make sure we've got the bulk and the balance sheet to support that growth."

Dan also mentioned they are focusing on OEM distribution. He pointed to Dell's deal earlier this year with Fonality and stated that other major co-branded and OEM branded products in lots of different places were forthcoming. PCMall being another example that Dan mentioned.

According to Fonality, they will use this additional capital to continue expanding its share of the $7B domestic telephony market and take a position in the $25B global telephony market, with a special focus on affordability and mobility for businesses with 5 - 500 people per location.

"Fonality's model has always been to free people from the prison of their cubicles, and to do so affordably," said Fonality CEO Chris Lyman. "But, with the rising price of gas and the increased adoption of high quality broadband, our vision of 'your office is the world' is nearly upon us. This investment by DFJ and Intel Capital, two top-tier investment firms, gives us the freedom to further accelerate our growth and acquisition strategy."

Randy Glein, managing director of DFJ Growth Fund, has joined Fonality's board of directors. "Fonality is the right solution at the right time," said Glein. "The company has developed a powerful, affordable communications platform for small and medium-sized businesses, allowing Fonality-enabled businesses to compete more effectively in the global economy. Fonality combines the benefits of open source development, rich proprietary features, and professional support to help its 5,000 customers take advantage of the latest communications innovations very affordably. Fonality supports workers wherever they are and lets them communicate inside and outside their organizations with easy-to-use software available everywhere, on any device."

Earlier this year, the company launched a relationship with Dell to sell Fonality products online at Dell.com and via Dell telephone sales. Fonality currently has 140 employees, offices in three countries, and operates four global data centers.


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