XConnect Raises $12 Million - Validation for Peering

Very nice press release that went public today, so it's ok to talk about it now. XC Global Networks just got its first major capital raise, and at $12 million, this gives them some space to really move VoIP peering forward. XConnect has been a leading advocate of VoIP peering, a space that is a bit like session border controllers. It's new, not well understood, not clearly defined, and not extensively deployed yet by carriers. There are a number of players taking different approaches to peering, with different models, settlement mechanisms, and solutions.

Anyone following this space would recognize the familiar faces, such as Stealth and Arbinet, and moving further afield, Nominum and Neustar, and on the SBC front, NexTone and Acme Packet. They all have a place in the ecosystem, but I think we're going to see consolidation as the peering space matures into a real market.

With this funding, XC is certainly in a good spot to be a key driver, and stepping back a bit, it's a very good sign of confidence that peering is being seen as a business opportunity. IPOs in the IP communications market have been dicey, and VCs are being selective about their investments, not just because IPOs are no sure thing, but also because it's hard to find good business models in this market.

That said, peering has nowhere to go but up, and no doubt the VCs see parallels in the market Acme Packet is addressing in terms of being at the beginning of the uptrend. On that front, it's a big day for XConnect, and for the health of VoIP peering in general, let's hope there will be more funding announcements to come.

Disclaimer - I am an Advisor to XConnect, so I'm personally happy about this news. However, I've tried to make this post as objective as possible, and hopefully that's how it comes across.

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