The company is one of several firms aimed at being go-betweens for the giant telecommunications companies as they buy and sell access to each other's networks.
While the idea has yet to catch fire among the carriers themselves, it has attracted considerable attention in financial and government circles in recent months, even leading Federal Communications Commission chairman William Kennard to propose modifying the idea for the wireless market.
RateXchange, along with competitors Enron Communications and Arbinet, is aiming to help the telecommunications companies use their expensive networks more efficiently.
Both the giants and the upstarts of the communications industry are criss-crossing the country with high-speed fiber-optic capacity that can carry increasing amounts of voice and data communications. But the demand for bandwidth on those networks fluctuates--and that's where RateXchange and its competitors think they can enter the picture.
They're setting up bandwidth exchanges, where companies can buy or bid on contracts for temporary access to another network, or sell capacity on their own. Thus, if one company finds it's not filling its pipes, it can temporarily and anonymously sell this extra capacity to another firm.
To date, however, the theory has moved ahead of actual practice. RateXchange says it's been building up its infrastructure and selling the carriers on the idea for the past several months. It now has contracts in hand and is ready to begin trading by the end of April, chief executive Ross Mayfield said.
"This funding allows us to go a heck of a lot faster," Mayfield said. The company will now speed up the construction of connection points where telecommunications companies swap access to each other's networks, he said.
The company also has plans to latch on to Kennard's drive to set up auctions in which companies can offer temporary access to unused wireless spectrum, although no details are yet available.
RateXchange's $32.7 million funding round was led by the Quantum Partners, advised by Soros Fund Management.