Online Voice Provider Vivox Raises Another $6.8 Million to Support “Explosive Growth”

Vivox, the Natick, MA, startup best known for voice software that allows inhabitants of virtual worlds such as Second Life, EVE Online, and EverQuest to talk with each other over the Internet, has completed a third round of venture funding totaling $6.8 million. New investor IDG Ventures SF of San Francisco led the round, with existing investors Benchmark Capital, Canaan Partners, and GrandBanks Capital pitching in.

The 35-employee startup, founded in 2005, has now raised roughly $21 million in its effort to adapt Voice over Internet Protocol (VoIP) technology to virtual environments and social networks. Co-founder and CEO Rob Seaver says the company has “seen fantastic growth and acceleration” since the last time Xconomy featured the company (in a September 2009 profile). Command and Conquer 4, an Electronic Arts title heavily anticipated by gamers, went into open beta testing this month with voice services from Vivox, and Global Agenda, a voice-enabled combat game for PCs from Alpharetta, GA-based Hi-Rez Studios, went live just yesterday.

Altogether, the gaming and social networking communities using Vivox’s voice services have 20 million members, up from 11 million in September. And their users spend about 3 billion minutes chatting per month—a figure that has increased by 50 percent just in the last 45 days, according to Seaver.

“The financing round came together because we’ve seen this explosive growth and we’re getting great traction, but we are barely scratching the surface,” Seaver says. “We estimate that there are 2.5 billion active accounts in online games and social networks globally. People are spending more and more time engaged with other real people in social experiences, and as humans the way we want to socialize is by talking to each other. So we raised the capital in order to capitalize on that opportunity.”

The bulk of the new money will go toward business development efforts to “broaden the reach” of the Vivox platform, Seaver says. “The platform is scalable and efficient, so the investments needed to support growth there are not major. The big thing is to get our service into more online games, and then use that as a stepping stone to other shared activities.”

Those activities could eventually include mobile games such as iPhone or iPad games or shared media environments where remote users could communicate by voice while watching a movie or TV show together, according to Monty Sharma, Vivox’s co-founder and vice president of product management and marketing.

IDG Ventures SF was an ideal choice to lead the new funding round, Seaver says, because of its focus on social media ventures. “The IDG group overall has its finger on the pulse of technology and social media globally, and between their consulting business at IDC, their various publishing businesses, and all their touch points with online games and the gaming industry, they make a fantastic partner for us.”

Phil Sanderson, managing director of IDG Ventures San Francisco, returned the compliment. “Voice is the key ingredient missing from a huge range of online experiences, and Vivox has proven itself able to provide mission-critical voice and exceptional service to leading companies around the world,” said Sanderson, who has joined Vivox’s board, in a statement. “I look forward to working closely with the team at Vivox to seize this tremendous opportunity.”

Wade Roush is a freelance science and technology journalist and the producer and host of the podcast Soonish. Follow @soonishpodcast

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