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Telecom Equipment - Wednesday, March 5, 2008

Virtual PBX Ring Central Closes $12M Round

A buddy today asked us what percentage of tech startups are hot. Maybe 20% was our answer. We'd count RingCentral in that 20%. Redwood City-based RingCentral has closed a $12M series B financing led by DAG Ventures with return investors Sequoia Capital and Khosla Ventures. Last September, the company closed a series A funding round of $12M from Sequoia Capital and Khosla Ventures.

Count us among those that are fans-as-users of Ring Central. The company says that it has locked down its 50 thousandth client. That actually seems like a small number to us given how stupid and expensive it is to hook up a traditional PBX for your company. The only thing that we see as holding back RingCentral's growth is that companies don't need to make new decisions about their PBX often. It's mostly startups that need to look into it. Moreover, you may not now that Ring Central or its virtual PBX competitors exist. But once you have looked at Ring Central vs. the old school PBX offers you'd have to be a dolt to go back in time.

In the virtual PBX market, Ring Central competes with 8x8 and M5 Networks among others. Publicly traded 8x8 had revenue of nearly $60M in 2007 and reported a profit in the December quarter. RingCentral, meanwhile, says it had revenue above $10M in 2007.

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