Ooma, a Palo Alto, Calif.-based startup that specializes in VoIP hardware and complimentary voice services, has raised a total of $18.3 million in new funding — of which $3.5 million came as a bridge loan from the investors. TechCrunch had previously reported that the company raised $14 million in the new round, which was led by World View Technology Partners. Ooma says it’s looking to raise another $5 million from key strategic investors.
I spoke with Rich Buchanan, chief marketing officer at Ooma, who said that with the new round of funding, the company reset its valuation down from previous levels. The company has had a tumultuous history so far. It made a number of mistakes early on, especially on the marketing front, the biggest one being hiring Ashton Kutcher. Earlier this year, it eased out founder Andrew Frame from the CEO role, replacing him with Eric Stang.
All of which helps to explain how the company, whose investors include the Founders Fund, has blown through $43 million. One original investor, Draper Fisher Jurvetson, decided that it had enough of Ooma and as such did not invest in this round. The new valuation of the company is being pegged at around $30 million.
This is yet another chapter in the life of the 3-year-old company. I’ve been following it closely and have always liked it as an idea — buy hardware once and get voice calling service for free — though over a period of time even I became disillusioned by its inability to make an impression in the market.
Nevertheless, over the past year or so, Ooma’s board has brought in a new management team, established solid relationships with many well-known retailers and is now inching towards the 100,000-device mark. And it’s about to launch its new wireless product, Telo. As for how the company was able to raise new capital, Buchanan said, “We are now measured and valued on our retail sales.”