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Funding On the Road To OZ

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If the popularity of cell phone text messaging is an indicator, then mobile IM and email will one day be just as popular. In just the U.S. 70 million people, or 36.9% of the cell phone users, sent at least one text message in June, while 12.6 million (6.7%) people used mobile IM and 16.5 million (8.7%) used mobile email, according to M:Metrics. That leaves an opening for startups to both build the infrastructure around mobile IM and email and also the services that ride on top.

One of those is Montreal-based OZ Communications, which has been surprisingly successful in winning over carrier and handset manufacturer customers with its mobile IM and email phone client and network server. While the company raised a $27.3 million from VantagePoint Venture Partners in 2004, OZ CEO Skuli Mogensen said in a chat yesterday that the company is in the process of closing an equally sizable round, which will be announced in the coming weeks.

The company works with carriers like Cingular, Sprint, T-Mobile, Virgin Mobile USA, handset companies like Motorola, Nokia, and Samsung and popular mobile IM companies like AOL, Microsoft’s MSN, and Yahoo.

The company has a storied history, and weirdly began as a 3D graphics company in Iceland in 1991, where OZ CEO Skuli Mogensen was studying at a university. The company says it managed to license its 3D technology to Microsoft, and later moved into Internet and telecom real-time messaging before the telecom bust of 2001. Then when times were tough Mogensen says he and ten executives did a buyout and recapitalization and in 2004 found its VantagePoint funding.

Maybe the most unusual thing about their history isn’t that they changed industries several times, but kept the same name throughout. Mogensen says that’s just because the name is just so darn good they had to keep it going. OK, if you say so. The new funding will be used for international expansion in Europe and Asia.

7 Responses to “Funding On the Road To OZ”

  1. The usage of java client, although poular and available as it is, cannot create a full email experiance because of the known java environment limitation.
    emoze is providing a free push email solution (and PIM sync) for mobile devices (mostly symbian, smartphones and windows mobile, coming soon in a lighter version for java) with a unique user experiance, carrier/network independent.
    emoze solution supports exchange, lotus notes, pop3/imap4 and web mail (yahoo, gmail, etc)

  2. The idea behind clients like the OZ are great, but based on my experience (and many of those on the ATT forums) the practice of the client needs work. I am on my 2nd phone because of problems with the OZ email client. The 2nd phone is doing better. But I have disabled the alerts and have learned that the OZ email client does not work well if you leave java running and the phone needs a reboot at least daily. Its usually faster to sign on the web client than to go through the gyrations to get OZ up and running. Based on my experience so far, I will never buy another phone with the OZ email client

  3. I’ve never had a problem with POP3/IMAP via cell phone, even over a bluetooth connection to some random device (for my personal email, I don’t care about it being pushed from Gmail). I think the fact that OZ that’s bundled with T-Mobile US phones/Blackberries helps in terms of volume.

  4. I sold my previous company, Trekmail, to Visto, which is also a player in this space. It is a very tough business because the carriers control the distribution channel so completely. Companies definitely need a lot financial backing to make it, as it can take one or two years to get a deal and then have product in market.

    IMHO, mobile email, especially for consumers, is going the way of Caller ID. It will just be built into every phone, and activated when you walk out of the store. Many phones, especially Nokia, already come with a POP/IMAP client built in.

    POP/IMAP doesn’t work so well on cellular phones, due to lots of minor issues (radio/battery use, needing to keep a data session active, etc). Because of this there is a role for hidden providers like Oz, Visto, Seven, etc to make embedded email apps that work more like SMS (always on, near immediate delivery, no configuration). Things are quite there yet, but in 2-3 years, I think mobile email will be embedded in nearly every phone and easily activated for people who want to use it.

  5. “… OZ Communications, which has been surprisingly successful in winning over carrier and handset manufacturer customers with its mobile IM and email phone client and network server.”

    OZ tends to cut deals that look very lucrative to the carriers and provides co-op dollars for promotion and advertising. OZ views their customer as the carrier (who they can buy) and not the end user who wants performance at low cost. Consumers try it because they currently go to their carrier for their mobile content and applications (something that seems to be changing) and they are simply not aware of the other great mobile email alternatives. See “Turn Old Phone Into a Smart Phone” by Om.