Intel Capital, the corporate venturing unit of semiconductor company Intel, has become the first institutional investor in Nymgo three years after its lead investment in online phone peer Jajah.
Intel has invested an undisclosed sum in Nymgo’s series A round, which is expected to add further strategic and financial investors by the end of the year.
Omar Onsi, founder and chief executive of Nymgo, is attending the Intel CEO Summit between 15 and 17 November, after the investment was revealed last month at World Economic Forum event in Morocco.
Onsi said Nymgo, which provides a voice over internet protocol (VOIP) service for people making international phone calls, was already profitable. This profitability was based on Nymgo having had its software downloaded by two million computers and provided 300 million minutes of calls since its launch in December 2008.
Onsi added: "All out customers are paying but we have spent nothing on marketing, it has only been word of mouth as we focus on low cost, international calls.
"We now plan to go global and who better than Intel Capital to help us? We were not looking just for money but for a business partnership."
He said Nymgo wanted to provide 10 billion minutes of international calls over the next three years to have a 6% to 8% market share of the VOIP market.
For Intel, the deal was struck out of its Middle East office and follows the sale of Jajah to Spain-based telecoms operator Telefónica in December for $207m.
Intel Capital had led Jajah’s $20m series C round in May 2007, and the company had raised $33m in total since 2006, according to data provider CrunchBase.
The other investors in Jajah were Michael Moritz, partner at venture capital firm Sequoia Capital, Venky Ganesan, managing director at VC peer Globespan Capital, and Andreas Kindt, chairman of the investment committee of T-Online Venture Fund, a corporate venturing vehicle of Germany’s Deutsche Telekom, Jajah said.
Intel’s interest in VOIP followed its rejection of the sector’s biggest success story, Skype, which was sold by its founders and VC backers for $3.1bn in 2005 to online auction company eBay before a majority was reacquired as a leveraged buyout. Sources at Intel Capital said it had rejected Skype over its business model.