Ifbyphone Secures $4.6 Million

Hosted IP telephony provider Ifbyphone said Tuesday it has secured $4.6 million in a second round of institutional funding from five venture capital firms.

“We view this new round of funding as a strong endorsement of our growth and expansion strategy,” said Ifbyphone founder and CEO Irv Shapiro. “It positions us extremely well to continue our expansion during these complex economic times.”

A spokesperson for the company said Ifbyphone’s overall growth relies on continuing marketing and sales success. “Small businesses are using our services to lower their telephony costs, and that trend is accelerating in this economy,” the spokesperson said.

Ifbyphone maintains a reseller network, which it started last summer. The number of participants was not disclosed. Resellers have access to the platform’s API, which gives them tools to build telephony applications around business processes. Resellers are paid a monthly residual based on customer subscriptions.

The company also plans to invest in its technology platform, which will soon include more features for medium-sized customers.

The funding round was jointly led by Apex Venture Partners and Origin Ventures, which also invested in Ifbyphone’s first round of institutional funding of $2.75 million in August 2007. They were joined by Spring Mill Venture Partners, i2A and Blue Crest Capital Finance L.P.

“We believe that Ifbyphone represents the next great wave of Internet-enabled business services,” said Ken Green, co-founder and managing partner at Spring Mill Venture Partners.

In contrast to some other hosted IP telephony providers, Ifbyphone is looking at ways to deliver interesting mashups beyond connecting phone calls. Case in point is its Google Analytics integration. In the same way customers track their Web sites’ performance in Google Analytics, Ifbyphone has made it possible for customers to track phone calls using the same interface.

“When our customers ask for something, we can often have a prototype out in days, so we tend to develop at ‘Google speed’ rather than ‘telco speed,’” a spokesperson said.

Ifbyphone claims it serves more than 8,000 SMBs, with more added monthly.

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