Fonality, the leader in affordable IP-PBX systems for small businesses, today announced it has secured $5 million in Series B financing in a round led by Azure Capital Partners with participation from individual investors. The Series B funds will be used to complete Fonality's management team, accelerate research and development and further invest in channel expansion. Paul Weinstein, general partner of Azure Capital, will join Fonality's board of directors.

"Fonality is attacking a global, multi-billion dollar market with innovative technology, disruptive pricing and a unique channel approach, which makes it a great investment opportunity," said Weinstein. "The company is being led by a team that has proven they can build successful mission-critical technology companies, execute aggressive growth plans and recruit top talent."

Since its availability in October 2004, Fonality's PBXtra IP-PBX has placed millions of calls and has been deployed by hundreds of businesses with thousands of lines. More than 700 resellers in 68 countries are offering PBXtra to their small business customers that are looking for an enterprise-class phone system at an affordable price.

"We are pleased to have Azure Capital lead our Series B round and accelerate our already significant growth," said Chris Lyman, Fonality's founder and CEO. "These funds will allow us to widen our distribution channels, so that our affordable PBX product line will be available to a larger number of small businesses."

Fonality's PBXtra product line provides today's businesses with an enterprise-class phone system for 40-80 percent less than the cost of traditional PBX systems. PBXtra's enterprise-class features include telecommuting, branch office support, voicemail-to-email, click-to-call, VoIP, softphones, support for IP and analog phones, and advanced call center functionality. Fonality has streamlined and simplified the complex tasks of PBX setup, administration and management, to make PBXtra the world's first enterprise-class phone system that can be installed and administered remotely using a Web-browser, without specialized training. The PBXtra software runs on standard PC hardware and uses layers of open-source Linux and Asterisk software to provide the least expensive option for small businesses deploying new IP-PBX phone systems.

PBXtra is available from Fonality or through a Fonality reseller. Pricing starts at $995 for the PBXtra Standard Edition server with unlimited licenses, or $2,935 with ten phones. PBXtra's Call Center Edition, which allows for distributed call centers, is $1,995. For more information about PBXtra or becoming a Fonality reseller, visit www.fonality.com.

About Azure Capital Partners
Azure Capital Partners is a venture capital firm with over $500 million under management, headquartered in San Francisco, California. Our goal is to identify, invest in and help build earlier stage information technology companies that are at the forefront of a transformative opportunity for growth. Our partners have a long track record of identifying and helping to build some of the most successful companies in communications, software and related technology segments. The Azure team is recognized for industry thought leadership and a unique professional investment approach to venture investing. Our proven methodology and primary research enable us to identify young companies in attractive markets whose business models provide sustainable competitive advantage.

About Fonality
Fonality is the leading provider of affordable IP-PBX systems for small businesses. PBXtra Standard Edition delivers all the advanced features of an enterprise-class phone system at an affordable price, and is so easy to use that it eliminates expensive phone support and configuration costs. PBXtra Call Center Edition provides businesses with call center functionality in addition to the PBX capabilities found in Standard Edition. PBXtra is deployed to thousands of business users in the U.S. and other countries. Fonality's products are available direct and through a network of more than 700 resellers.