Sipera Answers $10M VoIP Call

by Cassimir Medford

Sipera Systems on Tuesday said it has snagged $10 million in funding to use toward expansion of its VoIP security business.

Sipera products protect businesses from an array of VoIP-borne threats, including voice spam and toll fraud. The startup, whose funding totals $29.5 million, has managed to hook investors on the promise of VoIP despite a couple of high-profile VoIP company meltdowns.

“There is definitely some turbulence in the consumer VoIP service provider market, but there is very healthy growth in the wireless VoIP market that manifests itself in VoIP over Wi-Fi,” Sipera CEO Seshu Madhavapeddy said.

SunRocket, a well-funded provider of consumer VoIP services, recently shuttered its business, while market leader Vonage has admitted that it is considering bankruptcy after a number of legal setbacks.

Tony Seth, a general partner with Duchossois Technology Partners, the VC that led the funding round, believes that demand for VoIP security will pick up when unified communications, the integration of voice, email, and video into a single environment, becomes a reality.

“As corporate VoIP joins email and video in traversing the Internet it will become more open to attack, and enterprises and carriers will have to address the issue,” Mr. Seth said.

The VoIP market continues to splinter into multiple sectors, each with very different market dynamics and prospects.

VoIP as an alternate consumer carrier service is facing major problems, but VoIP as an application, represented by companies such as Jajah, Rebtel, Jangl, and Jaxtr, seems to have the confidence of the investment community.

In the last year Rebtel grabbed $20 million, while Truphone collected $23.4 million. Jajah took $20 million, while newcomer Ooma topped everyone with a $27 million haul, and most recently Jaxtr got $10 million.

VoIP equipment providers occupy the least turbulent sector of the market. They market gear for wireline service providers, such as carriers and cable operators, enterprises, and even wireless carriers.

But VoIP security, in part because there has not yet been an industrywide call to arms, remains a challenging market.

“Vendors have been warning businesses to get out in front of the VoIP security problem for some time, but that has not yet worked because there has not been some pivotal event that gets everyone’s attention,” said Will Stofega, an analyst with IDC.

And Yankee Group analyst Zeus Kerravala believes the VoIP security market will find traction when businesses truly embrace the Internet for their critical voice traffic.

“VoIP security will become important when business-to-business VoIP takes off,” Mr. Kerravala said. “What you see now is intracompany VoIP, so the concerns revolve around availability, not critical things like stealing VoIP calls.”

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