Hosted voice service firm RingCentral on Tuesday said it got $12 million in a second funding round led by DAG Ventures.

The new investment comes six months after the Redwood City, California-based firm announced an identical  $12 million first funding round which was led by Sequoia Capital and Khosla Ventures.

The Internet as a telephone service vehicle has attracted $893 million in VC funds in the last five years, according to Thomson Financial. But observers see an increase in the last year in the individual amounts being invested in Internet voice firms.

For example VoIP bellwether, Jajah, got less than five million from Sequoia Capital in its first funding round in February 2006, but scored $20 million from Deutsche Telekom in May 2007.

"Both broadband penetration and broadband speeds are increasing, and VoIP phones are much more readily available so the market is better positioned today than it has ever been," said David Weiden, a partner with Khosla Ventures.

RingCentral is part communications-as-a-service company, and part old-school telecom services firm. It competes directly and indirectly with an array of firms including New York based M5 Networks and consumer-focused companies such as Skype and Vonage.

The company hosts public branch exchange (PBX) services such as business phones, call forwarding, and VoIP on the Internet. Traditional PBX firms such as Nortel and Avaya sell hardware PBXes which are installed at the customers' premises.

RingCentral markets its wares to very small firms of 20 employees or fewer, but its real focus is on micro businesses -- the one- to four- person small offices and home offices.

"Very small businesses have been overlooked by communications firms but they are willing to pay a premium for services that make them look like large professional organizations," said Moe Tanabian, a principal with IBB Consulting.

"They don't have the money or the confidence in their longevity to invest in a hardware PBX, so an Internet based phone service hits the spot for them," he said.

Four-year-old RingCentral, which claims 50,000 customers worldwide, said it can have a customer up and running by the end of a two-minute sign-up.

"That's a pretty big differentiator in a market where customers would rather not wait two days to a week for phone service," said Vlad Shmunis, RingCentral's  CEO.