Why we invested in Sipphone, developers of Gizmo Project

Dawntreader Ventures has just led a $6mm round of financing in Sipphone, its first outside round of capital.  We look forward to working with Michael Robertson and Jason Droege to fuel continued growth in the Sipphone and Gizmo Project service and to roll out new features and functionality.  As you can see from Michael Robertson’s blog, the basic premise of the company is to provide SIP-based dial tone to any software or hardware device.  For those of you who don’t know, SIP is a standard protocol for voice and video. 

Gizmo Project voice calling and IM is booming on Macintosh, Microsoft Windows, and Linux computers because Gizmo Project works well and connects with every type of device like WiFi phones, other VOIP and IM directories like GoogleTalk and even the popular open source Asterisk PBX software. I think people are beginning to understand the difference between Skype who walls their customers in and won’t play nicely with anyone and SIPphone who connects to everyone making it possible to have just one address. Next week SIPphone will announce closing of a major venture capital deal which will help the company grow even faster.

As you can read in an earlier post, I, like Michael, am a believer in the growth of open standards. We want to provide consumers with the ability to have one address and connect to anyone on any network.  We want to expose our APIs to allow anyone or any company to easily integrate our VOIP/IM service into any application or device.  In addition, we want to make it extremely easy for consumers to bridge the Internet and traditional PSTN by extending the SIP functionality to non-PC devices such as routers, wifi devices, adapters, and dual mode cell phones.

While there are a number of factors that go into an investment decision, these are the key highlights for us.  Sipphone has a strong team led by Michael Robertson (founder of MP3.com) and Jason Droege (founder of Scour.net, first video search engine).  They know how to develop and market great consumer products and services on the web.  The market is huge as only a tiny fraction of overall global voice traffic is VOIP-based on the end-consumer side.  This is not a zero sum game between other VOIP/IM players but between the incumbents driving analog telephony and the new players driving digital subscriber growth.  Sipphone has demonstrated it has a winning product that can grow its user base and upgrade free users into paying customers for value added services and features.  The cost of sales and marketing is zero as Sipphone is a frictionless sale, especially when compared to a Vonage.  Finally, I believe that consumers are smart and demand interoperability and that open standards will win.

Published by Ed Sim

founder boldstart ventures, over 20 years experience seeding and leading first rounds in enterprise startups, @boldstartvc, Saas 2.0, googlization of IT, security, smart data; cherish family time + enjoy lacrosse + hockey

8 comments on “Why we invested in Sipphone, developers of Gizmo Project”

  1. Pingback: Alec Saunders .LOG
  2. Pingback: IP Democracy
  3. Pingback: IP Democracy
  4. Pingback: T.I.M. Blog
  5. Is Gizmo targeted for business customers? I ask because it is a free download that allows the user to call any other Gizmo user for free. I can easily understand the great cost and efficiency benefits for business (all your employees are Gizmo users and thus telephone costs drop), but what about residential? I already have an app that allows me to do the exact same thing, iChat A/V. Is the availability of these add-ons the only advantage Gizmo has over an A/V IM app such as iChat?

  6. Beware! Michael Robertson has yet to show profits to ANY investor in his companies, including MP3.com (Because of poor management by Michael, and him dragging MP3.com into legal problems against the advice of others, MP3.com sold to Vivendi for MUCH less than investors paid for it at their IPO.) Robertson personally has made money (from his founder shares), but you can’t find a single investor who has made a dime on any of his ideas.

    You’ve been warned.

    Dan

Comments are closed.