Fonality raises $12M for small business phone systems

Fonality, a company that provides Internet phone systems to small- and medium-sized businesses, has raised $12 million in a fourth round of funding.

Dan Rosenthal, the vice president of finance, says Fonality’s goal is to create an open source software application that provides everything that a small business might need in a call center. Services include instant messaging, land-line calling, mobile calling, voicemail, customer relationship management (CRM) and more.

While there are other Internet telephone companies out there, Rosenthal says Fonality stands out for price and ease-of-use — for a few thousand dollars (the standard version of its product PBXtra costs less than $1,000), Fonality can provide the same functionality that one of the bigger tech companies might charge $100,000 for, thus putting this kind of software within the financial means of a small business.

The Los Angeles-based company says it has 5,000 customers worldwide. It also sells its product through a partnership with Dell. Rosenthal predicts that Fonality’s low prices should make it an increasingly attractive option if the economic slowdown continues.

The funding was led by Draper Fisher Jurvetson, with participation from existing investor Intel Capital. Fonality raised $7 million last year.

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