ITXC Corp. (www.itxc.com), which began operation last month as the world's first Internet telephony exchange carrier, today announced the closing of $10 million in venture capital financing.
The new investors include Intel Corporation, Chase Capital Partners, Flatiron Partners, Spectrum Equity Investors, and Polaris Ltd. Proceeds will be used to fund the buildout of the company's domestic IP telephony facilities, further development of its international network, and marketing activities worldwide.
ITXC was founded in July of 1997 by Tom Evslin, formerly the AT&T Vice President responsible for building and running AT&T WorldNet(SM) Service. Evslin is ITXC's chairman and CEO.
Current ITXC board members Evslin and Elon Ganor, chairman and CEO of Internet telephony software pioneer VocalTec, will be joined on ITXC's board by Fred Wilson, Managing Partner of Flatiron Partners, William Collatos, Managing General Partner of Spectrum Equity Investors, and Edward Jordan, ITXC CFO and VP of Administration.
ITXC Corp (Internet Telephony eXchange Carrier) provides wholesale IP telephony services worldwide to resellers, facilities-based telephone companies, and other Internet Telephony Service Providers (ITSPs). The first service to launch was WWeXchange(SM) Service, which includes intelligent routing, network monitoring, authorization, termination, and settlement.
ITSPs use ITXC's service to connect their customers to every telephone in the world, regardless of the extent of their own physical footprint.
"We are privileged to have this select group of financial and strategic investors," said Evslin. "They have provided us both with generous funding and a wide range of business contacts necessary to grow at Internet speed. Having this funding available just as we begin service assures that we can leap directly from service introduction to the scale necessary to lead our part of the industry.
"IP telephony is the first Internet application for people who don't have or aren't using computers. It will quickly grow from an important way to lower the cost of communication to the foundation for rich communications services not possible on the traditional telephone network."
Revenue service began in April with calls from Moscow, Shanghai, and Sao Paolo being routed over the Internet for termination to any phone in the United States and, by combined IP and PSTN, to any phone anywhere in the world. By June of this year, the company will be providing direct IP termination in more than 25 additional international locations.
A select group of gateway operators provide termination for ITXC around the world. These suppliers, who've demonstrated that they can meet ITXC's quality standards, benefit from traffic originated well beyond their marketing areas but routed to them by ITXC. Many of these providers are also ISPs or facility-based telephone companies.
In the last month, the company has announced peering arrangements with IP telephony carriers DeltaThree and VIP Calling allowing it to deliver traffic to locations served by these carriers as well as terminate traffic from them.
Fortune picked ITXC as its "Cool Company" in its Sept. 29, 1997 issue. Red Herring identified ITXC as the private company most likely to benefit from Internet telephony in 1998.
"Global IP telephony traffic should exceed 5 billion minutes per month by the end of 2001, or about 10% of the worldwide telephony traffic. This represents a tremendous opportunity for a company like ITXC," said Francois de Repentigny, Industry Analyst at Frost & Sullivan.
"VocalTec was one of the original backers of ITXC because we understand the need for this service to help accelerate this market," said Dr. Elon Ganor, of VocalTec Communications.
"ITXC's services are one of the fundamental building blocks of the new worldwide communications services encompassing the Internet and PSTN. The company's strategy is closely aligned with our vision as it highlights the need for open, scaleable and manageable end-to-end solutions such as VocalTec's Ensemble product architecture. We believe VocalTec's complete product solutions and ITXC's services are crucial components for the development of the NextGen market."
"Intel looks forward to working with ITXC and others to develop the standards that this new industry needs to grow," said Frank Gill, Executive Vice President. "ITXC will be able to host and offer imaginative new services for both PC and phone users."
"Flatiron Partners' strategy is to invest in the leading companies in each of the major market opportunities being created by the Internet. ITXC is the leader in the Internet telephony business and we are thrilled to be involved in this exciting company," said Fred Wilson.
"Spectrum Equity considers ITXC to be a critical element in the development of voice over IP. The company provides the essential bridge between non-affiliated ITSP on a world wide scale," said William Collatos. "I'm looking forward to working with management as a board member to help the company grow as quickly as it must and we think it will." -- ABOUT THE INVESTING ORGANIZATIONS
CHASE CAPITAL PARTNERS (www.chase.com), with over $5 billion of invested capital, is one of the largest private equity investment firms in the world. Chase Capital Partners is an affiliate of Chase Manhattan Corporation. The firm has operations in New York, London, Singapore and Sao Paolo. Chase Capital Partners is a leading private equity investor in the technology, media, consumer, medical and retailing industries and a leader in private equity investing in Latin America.
DS POLARIS LTD. (Polaris) is one of the largest venture capital management companies in Israel with over $150 million under management. Polaris manages the Polaris Funds I and II. The Company invests in the areas of telecommunications, data communications, medical equipment, computer hardware/software and Internet, among others.
FLATIRON PARTNERS (www.flatironpartners.com), is the leading Internet-focused, early-stage venture capital firm in New York City. Flatiron Partners specializes in early-stage Internet software, services and media companies primarily in the New York metropolitan area and along the east coast.
Intel, the world's largest chip maker, is also a leading manufacturer of personal computer, networking and communications products. Additional information about Intel is available at www.intel.com/pressroom.
SPECTRUM EQUITY INVESTORS (www.spectrumequity.com ) is a leading private equity firm focused on investing exclusively in the telecommunications and media industries. Spectrum manages more than $350 million of capital from prominent institutional investors, including college and university endowments, foundations, pension funds and corporations. The firm has offices in Boston, MA and Palo Alto, CA.
VOCALTEC COMMUNICATIONS (www.vocaltec.com ) software enables audio, video, data, text and collaborative communications between personal computers and other devices over the Internet. The company is a leader in developing innovative, open standards products that bridge the Internet and the traditional public switched telephone network (PSTN) and drive the convergence of computing and telephone technologies. -- ABOUT ITXC CORP
ITXC Corp was founded in 1997 by Tom Evslin, founder and former VP in charge of AT&T Worldnet(SM) Service. The independent, privately held company, whose name stands for Internet Telephony eXchange Carrier, is the first to provide strictly wholesale services to the new Internet telephony industry.
These services currently include: network development and oversight, routing, authorization, settlement, and call detail processing. ITXC is building the Internet telephony industry by developing the largest connecting network of ITSPs from around the world and is making it easy and profitable for them to enter into this new industry.
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CONTACT: ITXC Corp.
Mary Evslin, VP of Marketing, 732/940-4333
mevslin@itxc.com
www.itxc.com
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