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OZ Communications Recieves $34 Million in Series B Financing

Canadian mobile messaging startup OZ Communications Inc. has grabbed $34 Million in a second round of VC funding. The latest round was led by the Caisse de d�p�t et placement du Qu�bec, a Canadian institutional fund manager. The firm's major existing investors also joined the round. The Montreal-based firm has raised over $61 million in VC funding since it started in 2002.

OZ says this financing will provide it with the means to continue to expand its mobile messaging offerings and extend its "sales and marketing reach." The firm currently sells mobile IM clients, gateways, and presence servers to carrier customers, ISPs, and handset makers. Some of its high-profile customers include Cingular Wireless LLC , Microsoft Corp., and Nokia Corp.

Analyst Kathryn Weldon at Current Analysis says that carriers still see mobile messaging as a way to bolster overall revenues and tap into new market segments. “Wireless data is seen as a way to maintain high growth and ARPU [average revenue per user] in the face of saturating voice dynamics for wireless,” she says. “Given the very low penetration of mobile email accounts as a proportion of all corporate email accounts, about 3 percent penetration, there is very high growth expected for this segment.

“In the consumer space, its a bit different, but the current generation that is growing up using IM and text messaging and simultaneously giving up wireline phones altogether is also going to buy data/messaging services,” she adds.

“OZ has a practical and well-developed product strategy with a strong competitive edge,” said Sylvain Gareau, Senior Vice President, Investments, Funds at Caisse de d�p�t et placement du Qu�bec. “OZ understands the mobile operators’ dilemma of providing coveted mobile services to its subscribers; and their solution responds to this complex situation while continuing to drive innovation and provide consumers with an easy way to stay connected.”

“We identified early on that OZ has the right technology, leadership and vision to succeed in this space,” said Eric Ver Ploeg, Managing Director at VantagePoint Venture Partners. “OZ is uniquely capable of enabling mobile operators to provide their customers with a simple way to access their network of friends and family with IM, email and a variety of additional mobile messaging solutions; while creating new revenue streams for the operator, handset manufacturer and portal. We are very pleased to be participating in this round of financing.”

“We welcome our new investors and like to thank them for their support and validation of our hard work and future prospects,” said Skuli Mogensen, CEO & Founder of OZ. “With this new financing and great position in the market with our existing IM & email products we are uniquely positioned to become the leading enabler of Mobile Messaging Services in a converged World.  We will continue to focus on usage and usability of our services as we embark on new integrated Messaging Services together with our customers and partners from around the world!”

Acquisitions in this space are also driving investor interest. Motorola Inc. recently bought Good Technology Inc. for its mobile email capabilities, following Nokia Corp.'s buyout of IntelliSync for similar technology the year before. Google has also bought into this area with its acquisition of Android, which made software for cell phones.

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