May 09, 2005
Vonage Growing Like a Weed
There are a lot of Vonage nay-sayers on the internet. I'm quite frankly a little confused because I've been using Vonage for over a month now and I'm happy as a clam. In fact a number of my friends have also switched over and had good experiences.Vonage CFO, John Rego, was quoted today saying Vonage has 650,000 lines and are adding 15,000 new lines a week. They just closed another $200 million infusion of venture capital, bringing total fund raising to date to $408 million. Those kind of numbers are mind-boggling and usually are only raised during an IPO. The company is currently spending about $200 per customer in acquisition costs and expects the latest round of $200 million funding to carry them to profitability.
A popular online tech blog has recently bashed Bain Capital for participating in the $200 million round citing previous failures like Webvan. That guy has no idea what he's talking about. It's like saying Babe Ruth sucks because he struck out once. Bain Capital has been minting money for decades and has one of the best reputations in the business. Venture capital is venture capital. You do strike out, but the home runs more than make up the difference. I guess I shouldn't expect much from a online tech blog, myself included. Lol.
"As more of the launches happen, oddly enough our acquisition costs go down and our ability to increase our adds goes up," he said. "When you have a big player ... enter into the market, it just helps raise the general awareness of VOIP, and you get a nice impact off of the marketing and the branding that they do." The funding was led by Bain Capital, and included previous Vonage investors New Enterprise Associates, 3i Technology Partners and Meritech Capital Partners. [Discuss]
