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OZ Raises $34M, Mobile IM Boom

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We wrote about mobile messaging company OZ Communication’s second round of funding in September, but didn’t have a size for the round. Now OZ says the second round is $34 million, led by Canadian institutional fund manager, Caisse de dépôt et placement du Québec, which brings the company’s total to around $61 million. That is considerable funding for a company that sells mobile messaging handset and server software.

The company has a decent business model, though: help carriers provide mobile IM and email to customers. Other mobile messaging companies like Berggi, which we wrote about recently, are trying the direct to consumer approach with a download that bundles IM, email and text. A lot of the newer basic phones we have tested are already including IM clients (with or without OZ), so getting consumers to pay a monthly fee for an extra mobile messaging application like Berggi’s seems like a stretch.

But the amount of subscribers using mobile IM, is going to grow dramatically over the next few years. A report that Forrester emailed us this morning says that IM is the number one “must-have” feature from a list of “advanced cell phone features” for U.S. teenagers when choosing a new cell phone model. The survey included 4,500 teenagers, and the other advanced features were things like camera, mobile Internet, push-to-talk, MP3 playback, mobile email and picture messaging. Makes sense to me, I am fully addicted to Google chat on BlackBerry.

5 Responses to “OZ Raises $34M, Mobile IM Boom”

  1. Robert Dewey


    I suspect the availability/affordability of those devices won’t be a problem as technology advances. PC used to cost thousands, now you can have one for $299.

    As for the funding numbers – Oz reports that they are on over 50M devices already. If the carriers are paying $1.99 per device for a license, you can see how it starts to add up.

    My main question is; why can’t carriers do this without Oz? Why can’t I just use my phone’s browser and point to a web-based IM client?

  2. I thought this was the age of the bootstrapper. The financing dilemma Oz faces is that the growth of IM is linked to execution on the part of mobile carriers and the availability/affordability of advanced cell phones and handhelds.

  3. Agreed. IM is the next big thing. But only if mobile operators get it right. Mobile IM will be huge so why has T-Mobile UK launched mobile IM on the PC only with its Web ‘n’ walk and HSDPA services for GBP 12.50 per month.

    Laptop 3G data is not the same as mobile IM – even if it is provided by a network operator.