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Summary:

Vonage, in a bitter feud with AT&T’s CallVantage and other VoIP service providers raised a whopping $105 million Wednesday, bringing its total VC funding to $208 million. Incidentally that’s $8 million more than the amount earmarked by AT&T to promote its VoIP services. To fans of […]

Vonage, in a bitter feud with AT&T’s CallVantage and other VoIP service providers raised a whopping $105 million Wednesday, bringing its total VC funding to $208 million. Incidentally that’s $8 million more than the amount earmarked by AT&T to promote its VoIP services. To fans of World Series of Poker, this will look like a master bluff. With around 240,000 customers Vonage for now seems to be the largest consumer VoIP provider. Using those metrics, venture capitalists have put a value of $867 per customer. Or about 29 months of premium package of $29.95 a month. The money is being put in place by old investors Meritech Capital, NEA and 3i.

Vonage Chairman and Chief Executive Jeffrey Citron said the funds would be used for expansion of U.S. retail outlets and launching service in foreign countries, Reuters adds. Next up Asia, Europe and latin America. Hey why leave Africa out of the equation. Citron said Vonage was cash-flow positive excluding the costs of acquiring new customers, according to the newsreport. Vonage expects to spend some $50 million to $70 million a year to market its service, but Citron said the latest round of funding should last “a long time.” Okay so what does this frenzy for funding remind me of? A little company called @Home Networks. As a sidenote, it seems like Vonage PR folks are playing favorites with Reuters. The news agency was the only with the report at 1 am est. There was no press release on the Vonage website, and neither was there any mention on WSJ or NYTimes.

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  1. The press release showed up around 6 AM this morning. I do think they gave Reuters the jump. That has to be their new PR agency, Connors handiwork…

  2. How ironic that on the same day this is announced the WSJ has a front-page article that mentions Covad’s $25K VOIP telephone company in a box. The barriers to entry are a littel low to justify this sort of valuation.

    BUBBLE … BUBBLE … POP

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