Sabeer Bhatia co-founded SabSe Technologies has acquired Jaxtr, a Internet Telephony startup based in Palo Alto. The amount of the acquisition has not been disclosed, but readers should keep in mind that Jaxtr, founded in 2005, had raised $21.5 million from a host of venture capitalists, including DFJ, Mayfield Fund, August Capital and Lehman Brothers. Terms of the deal – whether stock or cash based – have not been disclosed. Jaxtr was founded by Touraj Parang and Philip Mobin.
Update: Some inputs that may give you an indication of the situation that Jaxtr was in: Jaxtr had laid off 13 employess in October, leaving it with 30 employees in all. Soon afterwards, CEO Konstantin Guericke stepped down. Interim CEO Koohestani had told TechCrunch then that on an average, paying members go through $10 worth of jax calling credits in nine days, with 68 percent of minutes of use paid for.
Synergy with SabSe Technologies
— Audio Conferencing: In December 2008, Jaxtr launched FreeConnect, allowing free calling to mobile phones worldwide (details). The catch? Both callers will have to dial into local numbers. That is a form of audio conferencing, enabled by VoIP. A look at Sabsebolo.com reveals a similar model, albeit on the enterprise side. Sabsebolo also premium services at a marginal cost, and supports its services with advertising (rates). Jaxtr also offers paid services.
— Consumer and Enterprise: Jaxtr is a consumer focused business, and claims to have a worldwide user base of over 10 million, in 220 countries. The service will not be rebranded, and it is likely that it will serve as the consumer side of the business, providing free and low cost internation calling service. SabSe Technologies runs an enterprise focused Internet Telephony business, allowing telecom operators to offer low cost teleconferencing services. SabseBolo, according to Bhatia, is built using Asterisk, an open source software. Their clients telcos like Airtel and Tata.
— Regional: At present, Jaxtr doesn’t have call-in numbers in India while SabseBolo has operations in India, and call-in numbers in Delhi,Mumbai, Bangalore, Chennai, Hyderabad and Kolkata. Sabse is targeting India, Malaysia and some African countries. Update: Jaxtr did have numbers for Mumbai, but they were disabled by their “telco partner”, according to the companys blog.
It’s going to be tricky: Freemium vs Advertising; Or Both?
While Jaxtr offers Bhatia an opportunity to immediately scale his SabSe business, it is unlikely that it will help the enterprise side of the business: nearly two-thirds of Jaxtr’s users are in the 20s or 30s group. The freemium (Free + Premium) model tends to be rather lop sided, and the problem that Bhatia and SabSe will face, is of converting free users to paid users. Enabling such a service for calling from India to US market might interest advertisers – particularly gifting and shopping companies. At the same time, Bhatia wouldn’t want to irk existing telecom customers who make money from international calling. Note that Jaxtrs Mumbai numbers were disabled by their telco partner on May 16th 2009. Let’s see which way the Jaxtr-SabseBolo combine leans – we think it will be towards advertising, rather than freemium
(Updates: added inputs on layoffs, CEO resignation, and disabling of Mumbai services; corrected spelling of Palo in Palo Alto)