Rebtel Networks, a Swedish start-up using VoIP to offer inexpensive international mobile roaming service, today announced $20 million in VC funding.

The Series A venture funding comes from Index Ventures and Benchmark Capital. Rebtel was founded by Hjalmar Winbladh and Jonas Lindroth, who earlier founded Sendit AB, a mobile Internet software company acquired by Microsoft.

According to the company, the funds will be used to “advance Rebtel’s rapid growth, expand business development and marketing efforts, and accelerate expansion into more countries around the world.”

Rebtel’s service is already available in 35 countries, although it isn’t yet well known. It uses Session Initiation Protocol (SIP) to sell international roaming service for the flat rate of $1 a week. The service works by allowing its customers to obtain local, in-country numbers for themselves and the international parties they plan to call. One party then initiates a call to another, that party answers but hangs up and dials back and Rebtel’s session control software server is able to connect the two parties in a VoIP call that doesn’t incur high-cost mobile international fees, although it does use standard mobile minutes.

The company is targeting ex-patriots, small businesses doing business overseas and anyone else trying to avoid the very high cost of international calling on mobile phones.

“We were impressed by the momentum that Rebtel has amassed since its Beta launched at the end of June,” said Danny Rimer, Index general partner and new Rebtel board member, in a prepared statement. “Now out of Beta, it is highly possible that Rebtel can create a sea change in the telecom market.”

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