Vonage Raises Another $250M
This latest financing was led by affiliates of Bain Capital , with Vonage's existing investors -- including New Enterprise Associates (NEA) and Meritech Capital Partners -- chipping in as well. The debt funding brings Vonage's total of funding raised to date all the way to $658 million. That's even more than Zhone raised during the Internet bubble.
In a statement this morning, Vonage said its latest funding round will be used to build out its network across the United States and to continue its deployment of Enhanced 911. Vonage's own brass chipped in for the investment as well, the company says.
The funding was first reported in the Wall Street Journal over the weekend.
Vonage's previous round was $200 million in May 2005. (See Vonage Raises Another $200M.)
Vonage, which provides a voice service to broadband users, has been exploring various exit strategies this year as competition intensifies in the IP telephony market, with BellSouth Corp. (NYSE: BLS) the latest big name to enter the fray. (See Vonage Selects IPO Bankers, Sources: Vonage Is Eyeing the Exits, Microsoft Buys Skype Rival, BellSouth Launches Residential VOIP, and Google Talks the Talk.)
And there certainly appears to be an appetite among investors for Vonage. The VOIP service provider's CEO, Jeffrey Citron, told the WSJ that his company had been looking for $155 million in new funding, but the level of interest in the offer was strong enough to warrant the higher amount.
Vonage is believed to have already turned down one bid of around $1.5 billion, with BellSouth and Sprint Corp. (NYSE: S) identified as potentially interested parties. (See Vonage Hearing Buy-Out Bids.)
If Vonage is ultimately acquired, it wouldn't be the first big VOIP name to find a new home: Earlier this year Skype Ltd. was bought for $2.6 billion by eBay Inc. (Nasdaq: EBAY). (See EBay Buys Skype for $2.6B.)
Vonage has more than 1 million subscribers, a milestone reached in September this year. Its basic service, which allows unlimited calls to anywhere in North America, is $24.99 per month. (See Vonage Exceeds One Mil .)
— Ray Le Maistre, International News Editor, Light Reading