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SunRocket Fuels Up With $33MSunRocket Fuels Up With $33M

The Virginia-based pure-play VOIP provider says the race for VOIP converts is far from over

August 25, 2006

2 Min Read
SunRocket Fuels Up With $33M

SunRocket Inc. said Friday it has gathered another $33 million in venture capital, showing that not everybody is sour on consumer VOIP after the depressing Vonage Holdings Corp. (NYSE: VG) IPO in May. (See SunRocket Takes $33M and Vonage Gets a Haircut.)

The Vienna, Va.-based firm says the new money is its third round of funding, and that its funding total is now $80 million. SunRocket says all of its existing investors -- BlueRun Ventures , Mayfield , and DCM - Doll Capital Management -- pitched in for the new round, as well as a few new ones: Varma, The Grosvenor Funds , and Brú Venture Capital.

SunRocket and its investors believe the race for VOIP subscribers is just getting underway. “I think what it says is that while residential VOIP service is growing quickly, we are still not in the home stretch of the horse race,” SunRocket spokesman Brian Lustig told Light Reading Friday. “We think that only about a tenth of broadband-connected homes in the U.S. now have VOIP service.” Lustig says roughly 50 million U.S. homes have broadband service, while only about 7 million now subscribe to VOIP. (See SunRocket Expands VOIP Service.) Infonetics Research Inc. predicts that there will be 24 million North American VOIP subscribers by 2008.

Lustig says SunRocket started 2006 with roughly 50,000 subscribers and now serves about 150,000. “I can tell you our churn and subscriber acquisition costs run lower than Vonage, based on the latest numbers we’ve seen from them,” Lustig says.

Vonage spokeswoman Brooke Schulz chose not to comment on that claim, but said: "We welcome them to the marketplace; we see it [the funding] as a positive for the industry." At last report, Vonage is still well ahead of SunRocket, with more than 1.6 million subscribers.

“In the end, the race for VOIP subscribers will produce a handful of winners, and we expect to be one of them,” Lustig contends.

SunRocket says it will use its new investment money to fast-track enhancements to its product, to set up new sales channels, and to help pay for a new customer care center the company opened in Springfield, Mo., on August 1.

SunRocket offers a full-year, flat-rate residential calling package for $200. That includes unlimited calling to the U.S., Canada, and Puerto Rico and one extra phone number, according to the company’s Website.

— Mark Sullivan, Reporter, Light Reading

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