ISP Yipes lands $139 million investment

Yipes Communications, a start-up that offers cheap, fast Internet service to businesses, announced Monday it has raised $139 million in additional funding.

Yipes, which raised about $91 million in two earlier rounds of funding, competes against traditional phone companies, such as AT&T and Verizon Communications, by offering businesses more than twice the Net speeds at half the cost.

Yipes competes against other start-ups, such as Telseon, which hopes to take a chunk of the traditional phone companies' profits by convincing businesses to take a chance on the relatively unknown carriers.

While the traditional phone companies offer Net connections through their older data networks, Yipes is using Ethernet networking technology to connect businesses and service providers to high-speed optical networks in metropolitan areas.

The $139 million in additional funding came from 14 venture capital firms, banks and investment funds, Yipes executives said in a statement. Investors included Charter Growth Capital, Castle Creek Partners, The Kaufman Fund and Westway Capital, among others.

The extra funding will help Yipes expand its services nationwide. The company--which currently offers service to 15 cities, including Boston, Chicago, San Francisco and Washington, D.C.--hopes to expand to 58 cities in the next few years. Yipes also plans to offer phone calls over the Net to compete against traditional phone companies.