Deutsche Telekom backs Skype pretender

30 May 2007

Jajah, a voice over internet protocol (VoIP) provider, which was founded by two Austrians in 2005, has just received venture capital (VC) funding from T-Online, the corporate venture arm of Deutsche Telekom.

This funding is the most recent in rapid investment into the VoIP company. Earlier this month Intel, which already has links with Skype, was head investor in a VC group investing US$20mn in Jajah. This represents serious commitment on the part of Intel.

“Jajah is the first voice 2.0 company to receive this level of industry validation and support. The long-term implications can’t be understated,” said Roman Scharf, Jajah co-founder.

Jajah recently said that it had acquired over two million users from 55 different countries around the world in its first year of business. Skype, on the other hand, has 100 million registered users and roughly nine million concurrent users as of January of this year.

What makes Jajah an attractive investment in the face of Skype’s roaring success is that although it provides essentially the same service as Skype there is no software to download or web client to start up before use. Jajah is browser-based.

Unlike Skype, Jajah operates by calling a landline or mobile from the user’s internet connection, then setting up when the originator of the call picks up their phone; the destination number is automatically dialed.

Deutsche Telekom’s decision to invest in Jajah may be moved by the fact that its landline profits have declined by 58pc in the last quarter as a result of customers leaving for cheaper operators.

“The communication landscape is rapidly evolving”, said Andreas Kindt, chairman of the Investment Committee of T-Online Venture Fund and member of T-Com Management Board for IT.

“By investing into companies like Jajah we will be able to continue to bring users around the world the innovative solutions they are looking for. The investment aligns perfectly with our strategy while staying at the forefront of communication innovation,” he said.

By Marie Boran