InfiniRoute, a venture-funded start-up telecommunications company formed from the merger of two companies, chose Princeton as its headquarters and is moving 30 employees to 4,500 square feet at 4356 Route 1 South. It expects to have 50 people there by next year, and eight salespeople are working in remote locations.
CEO Gary Tauss says he felt it was important to consolidate operations in an area where he could recruit talent. Some key employees have already come from, for instance, the global wholesale telecom carrier at 750 College Road East, Teleglobe (formerly ITXC).
InfiniRoute received $8 million in funding last November and expects to do another round this year. Currently the company has $1 million in monthly billings and expects to break even by this time next year. "We think we will be of size and profitability to look at the public market at the end of 2007," says Tauss, "when we grow to a couple ofhundred people."
InfiniRoute provides fully managed Voice over Internet Protocol (VoIP) "peering" services for wireline and wireless carriers worldwide. Peering services involve connecting large telephone call originators, such as AT&T and Verizon, directly to cellular networks around the world. "We use VoIP to connect big guys to their existing customers," says Tauss. For instance, if you use Verizon to call to the United Kingdom, Infiniroute might be making that call happen, connecting the United States carrier with the UK carrier.
"InfiniRoute sells to tier 1 carriers, the 40 largest international carriers," says Tauss. "They don’t like their individual names released, but our current customers include 5 of the top 10 carriers in the world." Just announced is a contract with Telefonica International Wholesale Services, which has an international data network that connects Latin America, the United States, and Europe.
"India, Bangladesh, and Pakistan," says Tauss, "are each adding 1 million new subscribers a month. Together, the companies in South America are adding 1 million. These high growth areas are where we focus."
Infiniroute was formed by the 2004 merger of Proficient Networks (established in San Francisco) and IP Deliver (which had temporary offices in northern New Jersey). The merger was triggered by the venture capitalists who had invested in Proficient Networks. "Proficient Networks had a good technology that they were selling to carriers, but didn’t have sales traction. IP Deliver didn’t have as substantial a technology base, but it was selling to the same clients," says Tauss, who joined the company after the merger.
A native of Chicago, Tauss is in the process of moving from California with his wife, a licensed clinical social worker focusing on early Alzheimer’s disease, and their school-aged daughter.
Tauss, a psychology and chemistry major at the University of Illinois at Urbana, Class of 1975, who also earned his MBA there, started his career working at BBN on the Internet, before lay people knew what the Internet was. BBN is generally credited as an Internet pioneer. He ran BBN’s European division out of London and also worked in Washington, DC office. From 1989 to 1993 he worked at GTE in Maclean, Virginia, then moved to California to be with Ramps Network, a maker of small office routers that went public in late ’90s and was bought by Nokia.
Tauss’s next company was a startup, Tollbridge Technologies, which did voice over cable systems. "We got very large and the company was sold in 2002 after it got small," says Tauss.
Then he was CEO of Persona Software, based in Santa Clara. A fixed mobile convergence firm, it built a single handset that could be used anywhere. "It was a cell phone with WiFi built into it," says Tauss. So if you used your cellphone while driving, the calls would automatically switch to your house’s WiFi when you came home. "You didn’t have to worry about which phone you were using," notes Tauss. He stayed with Persona Software for 2 1/2 years and still thinks it is a great company, but says he liked the opportunities offered by InfiniRoute ("it’s an interesting high growth area") and liked Princeton ("a combination of good schools, nice climate, nice place to live, and no drive-by shootings").
His father worked for 42 years as traffic manager for Inland Steel Corporation, one of the six biggest steel companies in the country. "Even though I have not followed the same path, because I worked for a number of companies, I learned from my father about the value of focusing on the large companies, that you might as well focus on the big guys, because they are the only ones that matter," says Tauss.
Taking into account that a very few companies in every industry tend to dominate and get the vast majority of the business, he likes the InfiniRoute business plan, to focus on the 40 largest telecoms.
Tauss hopes to hire five to eight people this year and is looking for those with experience in networking operations, marketing and sales, and Linux-based software development. Shortly after he took the job as CEO he hired Jay Merancik, former vice president of operations at ITXC, and Neal Axelrod, former vice president of sales at ITXC. Tauss’ vice president of finance, Michael Loiacono, is an industry veteran from a telecom company in Australia, but before that he had worked at Voxware, now on Franklin Corner Road, and ITXC, on College Road.
Though InfiniRoute and ITXC (now Teleglobe) overlap sometimes, Tauss explains, ITXC focuses on the smaller customers. Founded in 1997 by Tom and Mary Evslin, ITXC grew to 270 employees and 70,000 square feet. It came along at the time of deregulation and the growth of competitive carriers. "In the two years from 1997-99," says Tauss, "3,200 new carriers were added in the United States alone." ITXC went public at the height of the dotcom boom and was bought a Canadian company Teleglobe, which was itself bought last month by an Indian consortium, VSNL. Tom Evslin retired to write an online book, a "blook," about dotcoms.
Tauss says that, over the last 10 years, prices dropped but quality has also gone down for these reasons:
More carriers are available, but their quality varies widely.
Because networks are more complex, there are more opportunities for things not to work.
In some markets, companies on the other end are very unstable. "The most common complaint is that, after someone goes overseas, their voice mail doesn’t work."
InfiniRoute does the work of aggregating the smaller carriers, and it presents them to the big carrier as a single point of contact. It uses the Internet to make the connection. "No one else does that because we are uniquely focused on the big carriers," claims Tauss. "Our real competitors are the old voice networks that the carriers have around the world."
Seven patents developed at Proficient Networks have been filed. "This technology allows us to use a number of Internet carriers and get quality better than, or equal to, their old connection." A typical large customer buys capacity for simultaneous phone calls and pays from $40,000 to $100,000 a month.
"But we’re small, and not everyone knows about us," says Tauss. "Wewant to make sure that our message gets out before someone else putsout another message claiming this space."
Tauss has sublet the Route 1 south space, and he expects to expandelsewhere. "As I look at the area there is new office space going up.We might be better off looking again in a year or two and moving intomore attractive space rather than trying to guess now about where thehot places are."
InfiniRoute Networks Inc., 4365 Route 1 South, Suite 221, Princeton 08540. Gary Tauss, CEO. 866-776-3424; fax, 415-364-1090. Home page: www.infiniroute.com