Vonage to raise another $100 million


Running a VoIP company costs money – a lot of money. Perhaps that’s why Vonage which has already raised $105 million in VC funding in its last round, is going for another $100 million in VC dollars, reports Business Week’s Justin Hibbard. That would bring the total VC dollars to over $300 million! The company is raising money at a pre-money valuation of $950 million, he points out, before going in for an IPO by end of 2005. Interesting timing, given that company is facing some issues right now. Incidents of outages have increased, Texas has sued them over e911 and competition from Cable guys is increasing. Vonage and others who have used the “arbitrage” well, but with Kevin Martin at FCC, well this party might come to an end. I think it is prudent for Vonage to raise as many dollars as it can, while it can.


Mohinder Mahal

I think you are being too premature to dismiss the likes of Vonage. First, the VC funds are not flowing as easy as they were 4 years back – so $100m is a big deal. Secondly, Vonage is not going to disappear – but at worse be a target for a buyout in the future. Fianlly, with the problems you talk about, these exist everyone – even the baby bells had their fair share.

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