Ottawa Business Journal

Voice-over-internet-protocol software company Natural Convergence Inc. has obtained US$10 million in its third round of financing, which it expects will bring the company into the black.

The Ottawa-based company, which focuses on VoIP applications for the small-business market, has secured a total of $29 million in funding since its inception five years ago.

Natural Convergence's chief financial officer Mark Murray said the company would be using the funds to court new clients among North American service providers, as well as to help existing clients expand.

"We currently have 10,000 small-business users globally," said Mr. Murray of its VoIP software. "We hope to work with service provides to continue increasing the number of end-users."

The company works with service providers to deliver telephony services through its Silhouette software, which helps small businesses replace old key phone systems with virtual key systems over broadband, Mr. Murray explained. There are currently 32 million key systems in use in small businesses across North America, and as many as 200 million worldwide.

Mr. Murray said the advantage of Natural Convergence's Silhouette software was that it was very easy to use, compared to similar applications provided by competitors such as U.S.-based Sylantro Sytems and BroadSoft. He said the software would save time and money for small businesses of five to 50 staff, especially those with no IT departments and those with multiple sites, such as car dealerships.

"(The small businesses) are in control, they feel empowered, and there are decreased costs (when using the software)," said Mr. Murray. "Margins are also high for service providers, and they can now supply feature-rich, easy-to-deploy systems."

Mr. Murray noted that the small-business market was under-served, and that it was somewhat of a niche market which competitors did not focus on.

As a result, he said, the privately-owned company is earning revenues "in the millions and growing exponentially." the latest round of funding is expected to drive Natural Convergence to profitability and positive cash flow.

The company's financing is being led by the Business Development Bank of Canada (BDC) Venture Capital and Wesley Clover, the venture capital firm founded and chaired by telecommunications industry leader Terry Matthews.

Natural Convergence has deployed its software to small businesses through North America, the United Kingdom, the Netherlands, and the Caribbean.