Telefonica Digital acquires video chat platform TokBox

TokBox's OpenTok platform allows developers to embed video chat into any Web page

I can’t really do video chats.  Something about the idea of someone staring at my face while I talk at them just weirds me out too much.  But it appeals to a wide swath of people, which is probably why Telefonica Digital, the global business division of telecommunications company Telefonica, has snatched up video chat startup TokBox.

The two companies made the announcement Thursday morning, but the terms of the deal were not disclosed.  Telefonica Digital’s head of investments, Tracy Isacke, tells me that “everyone is well satisfied.”

Telefonica Digital was created less than a year ago to expand Telefonica’s offerings for its 311 million customers.

“We see video as a core capability for our future products and services, and our preference is to buy or build services we consider to be core,” said Isacke.  “We had a good look at all the video platforms and were incredibly impressed by TokBox’s OpenTok Platform and the team. We saw them taking the lead in bringing together the fragmented and often clunky video technologies into one seamless experience.”

Founded in 2007, TokBox initially came out with two products: a consumer-facing Web-based chat application, and an API called OpenTok, which allows develops to build their own video chat apps by embedding video chat conversations into any Web page.  OpenTok allows groups of up to 20 people to chat while browsing the Web.  Using TokBox’s Javascript APIs, developers can build a flexible, customizable app to provide a multi-way video chat experience that can take place on different Web pages simultaneously. 

TokBox ended up sunsetting its consumer-facing video chat app in February 2011 to focus instead on the OpenTok platform.

“Telefónica Digital presented a compelling vision for our technology in a way that will accelerate development and rapidly expand the global reach and customer base. It is a great result for our team and our shareholders,” said TokBox CEO Ian Small.

Small added that the entire TokBox team of 35 will be staying on and the company will be keeping its San Francisco office.  Ian Small will stay on as CEO and Telefonica Digital’s Director of Product Development and Innovation, Carlos Domingo, will join the TokBox board of directors as Chairman of the company. 

The OpenTok platform will continue to run as usual, but it now brings video to Telefonica’s array of offerings.

Telefonica says it plans to leverage the TokBox platform to add cross-platform Web-based video communications to its existing voice and messaging services.  It will be offered both “directly via tailored solutions” (which I can only assume means consumer-facing services), as well as in the form of APIs and applications for developers and businesses, so they can create their own offerings.

TokBox raised $26 million altogether from Sequoia Capital, Bain Capital, DAG Capital, Roelof Botha, Tony Bates, Jawed Karim, and Rajeev Motwani.