Menlo Park, Calif.-based Jaxtr, a mobile social networking company, said today it has raised $10 million in a second round of venture capital led by Lehman Brothers Venture Partners. It brings the company's total raised to $20 million. In addition to the funding, Jaxtr is also announcing today that it is launching a pay-service that let's people make unlimited international phone calls from their mobile phones at a low cost. To date, Jaxtr has built out two other businesses: First, it has its mobile social network, which allows people to connect online and then talk over the phone, using a Jaxtr phone number to ensure it's a local call. Jaxtr also has an ad-supported business that lets people make and receive phone calls and text messages internationally for free. The pay-model came about after people used up their free monthly minutes, which is capped at 100, and wanted the flexibility to call anyone, not just people in the Jaxtr network.
In an interview, Jaxtr's CEO Konstantin Guericke provided a few more details about the company:
-- Number of Users: Jaxtr currently has more than 10 million users in 220 countries after about a year in business.
-- How it works: To keep costs low, the company uses its own servers and telephone switch and doesn't advertise. When a person wants to make an international call, he or she provides both the phone number and their own number, and then Jaxtr provides a local phone number for the person to call, and connects the call in the background using VoIP. Because a person is calling a local number, it's not actually an international call.
-- Jax Credits: People can buy Jax credits to make international calls. The rates are low. From the U.S. to Canada (1 cent a minute); China (1 cent a minute); India (6 cents a minute); U.K. (1 cent a minute); within U.S. (1 cent a minute).
-- Venture capital: The company used its first round to build the site and the advertising and pay business models. Guericke said he'll use the second round to build new features, like sending SMS, or providing calling options within social networks, but won't say what they are. He said they will also beef up their customer service and network. "We are expecting a much higher call volume," he said. The first round was raised by August Capital and three of the early Skype investors—Draper Richards, Draper Fisher Jurvetson and Mangrove Capital.
-- On providing voice capabilities to social networks: As the founder of LinkedIn, Guericke knows a thing or two about social networks. He says, up until now "Social networks have been silent, and social and silent don't go together." Jaxtr is trying to change that by letting people others they are interested in meeting and talking to them on the phone instead of communicating online. Because of the social networking component, Jaxtr's demographics are much younger than Skype's, Guericke said. Whereas Skype users are in their 30s and 40s, two-thirds of Jaxtr's users are 20s and 30s, he added.
