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Summary:

Digium, the company that spawned open source PBX and telephony software, Asterisk, has received $13.8 million in Series A funding from Boston-based telecom specialist venture fund, Matrix Partners. Digium is the latest amongst a growing list of VoIP-related venture investments, and perhaps the most prestigious. David […]

Digium, the company that spawned open source PBX and telephony software, Asterisk, has received $13.8 million in Series A funding from Boston-based telecom specialist venture fund, Matrix Partners.

Digium is the latest amongst a growing list of VoIP-related venture investments, and perhaps the most prestigious. David Skok, a general partner at Matrix Partners who won his VC stripes by backing JBoss, an early Open Source software company joins the board of the company. Digium is one of the early pioneers of the open source telecom movement.

This also marks the latest chapter in the amazing story of Digium founder Mark Spencer and by extension, the Asterisk PBX software. In 1999, Spencer started the Huntsville, Alabama-based operation with his savings and a few thousand dollars in investment from his parents.

Since then, the simple little PBX he wrote has become a rebel yell for telecom hackers, and Spencer a rock-star at VoIP conferences such as VoN. While it is not the only open source PBX, it certainly is one of the most popular.

The company turned profitable in 2002, and remains so. Digium has experienced break neck growth over past few years. Today Asterisk boasts over one million users. Nearly, 1000 copies of the software are downloaded every day. The profitable status of the company, however made me wonder why does Digium need VC dollars?

Spencer explains that the company will use these funds to expand its operations by selling a variety of Asterisk-based IP-PBX systems to small business and large corporations. In doing so, the company might end up competing with others who base their products on Asterisk. Fonality, a Los Angeles-based company, for instance sells Asterisk-based PBX systems to the very same small and medium sized businesses.

“To me, Digium has the same, perhaps even better characteristic than that of JBoss,” says Skok, “It has a highly seasoned product, market leadership, and is profitable.” And it is also one of the hottest VoIP plays around.

Skok may have scored a coup, even if it might have cost Matrix some serious dollars in terms of valuation. Digium, he says has everything to make it one of Matrix’s most successful open source companies. With many old-styled PBX phone systems being replaced by new VoIP-based systems, a low cost offering based on Asterisk can be very attractive for buyers. Fonality, for instance, has quickly garnered 10,000 users for its ultra low-cost Asterisk-based devices.

Though he only has known Spencer for a few months, Skok says his big epiphany came when he downloaded and installed Asterisk on his computer, went overseas, and plugged into his broadband connection. He was soon making calls all over the US, as if he never left his Boston office. The Asterisk became his extension, and he was hooked. “Digium is definitely in a position to become the next big open source company, behind Red Hat, JBoss and MySQL,” says Skok, clearly smitten by his latest investment.

Also, A Short Q&A with Digium founder Mark Spencer.

  1. I seem to be unable to find your trackback link, so I do here a manual trackback :

    http://www.lostinbrittany.org/dotclear/index.php?2006/08/09/62-digium-recoit-138-millions-de-dollars-en-investissement

    “Om Malik vient de publier un billet qui a fait ma journée un peu plus agréable : Le créateur d’Asterisk obtient reçoit 13,8 millions de dollars en investissement.

    Digium est la société derrière l’un des meilleurs logiciels libres que j’ai jamais trouvé : le PABX Asterisk…”

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  2. […] GigaOM: “Digium, the company that spawned open source PBX and telephony software, Asterisk, has received $13.8 million in Series A funding from Boston-based telecom specialist venture fund, Matrix Partners.” Posted by Richie @ 8:18 pm Tags: VoIP […]

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  3. […] Om has the story in a post titled, “Asterisk Creator Gets Venture Backing.“  Basically, the company was started by Alabama good-ole boy, Mark Spencer with few thousand dollars supplied by his parents.  Today, more than 1,000,000 people use the platform (1000 copies are downloaded each day).  We have been talking about it for a while (we use it ourselves).  Previous Asterisk posts: […]

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  4. […] [14:51] – Asterisk Gets Funding […]

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  5. […] It should also be noted that Digium, the parent company that created Asterisk, got $13.8 million in venture funding this past week. Spencer explains that the company will use these funds to expand its operations by selling a variety of Asterisk-based IP-PBX systems to small business and large corporations. In doing so, the company might end up competing with others who base their products on Asterisk. Fonality, a Los Angeles-based company, for instance sells Asterisk-based PBX systems to the very same small and medium sized businesses. […]

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  6. What Asterisk doesn’t do is truly make PBX-style capabilities and functionality easy to install and manage, and therefore make it really affordable for Really Small Businesses.

    I have small shared suites office building and researched PBX systems in December. I have about 6 tenants (companies) with about 15-20 total employees. Each incoming call has to be answered by the receptionist in the appropriate company’s name, and auto-attendants and voicemails need to operate similarly. I explored Asterisk, but found that it suffered from much of the same jargon and poor UI that proprietary systems do. I ended up buying a Nortel Norstar MICS system because of really wide availability of hardware and consultants. I bought from a distributor, learned and configured as much as I could, and hired an independent consultant to do the rest. I saved about 50-75% off the best quote I got.

    But what I really wanted was something that works like a computer network. Plug in a device that works like a router with easy config; plug in another that works like a server (voicemail, etc.); and then a bunch of others a nodes on the network (phones, like computers and peripherals). All of this would be done via a very simple and intuitive web interface that just about anyone could understand (ie, do for office telephony what Apple did for digital music players).

    The great thing about Asterisk is that it enables this layer to happen. Hopefully someone will come along and create it.

    And if I missed products that do what I’m talking about, can someone point me to them? ;-)

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  7. Okay, call me stupid. I’m looking at Fonality, and it appears they are attempting what I was describing. Perhaps it is was I was looking for and missed it. Damn!

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  8. Patrick, what you’re waiting for is coming Real Soon Now™. Digium is now seeding developer kits for Embedded Asterisk running on uClinux for the Analog Devices Blackfin DSP (a powerful DSP/CPU for $5), which will sprout an ecosystem of (hopefully) easy-to-use IP PBX appliances. The uClinux/Blackfin microcontroller ecosystem is also open-source hardware — there is a lot of development and I would not be surprised to see closed-box 50-user Asterisk appliances (even with T1/E1 interface) by this time next year. Remember that routers used to be high-speed equipment as well — now it’s a $25 commodity piece from DLink or Linksys. This is what kind of disruption Asterisk is going to be bringing to the telecom space.

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  9. [...] gigaom.comDigium, the company that spawned open source PBX and telephony software, Asterisk, has received [...]

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  10. [...] for instance, has become a source of innovation, and has helped spawn companies like Truphone. And venture dollars have started to flow into open-source startups at an increasingly rapid clip. Open source is slowly but surely touching [...]

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