Vonage weighs down all VoIP Service Cos

April showers, they say, bring May flowers. But if you are an independent voice service provider, like Vonage and SunRocket, then in April, you were showered with just bad news, and May is more like Dis-May.

Ever since the Vonage-Verizon patent fracas became a street fight, investors – both public and private – have lost taste for independent VOIP companies. Vonage’s stock has done a not-so-graceful swoon. And Packet 8 has seen its already anemic stock get pummeled.

Now we are hearing that even private money, aka venture capitalists, are turning their back on VoIP companies. Our sources in the business tell us that SunRocket, the #2 independent is out raising its Series D round of financing, hoping to get $20-to-$40 million to stay in the game.

However, no VC is ready to bite just yet, not with the Verizon-Vonage tussle hanging over the market like a dark cloud. It is not just SunRocket – pretty much the whole sector is a do-not-touch zone right now.

This is a crucial round of funding for the company that has raised $80 million so far in three rounds of funding, lost its co-founders, and brought in a new CEO who has a very different view of the world. If that is not enough, then the growing strength of cable in the VoIP business is only going to add to their miseries. Not that we are exactly surprised.

Previous stories on SunRocket and Vonage.

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