August 25, 2004 12:36 PM PDT
Vonage doubles its money
The Edison, N.J., company announced the funding Wednesday and added that it has raised about $208 million in total. Vonage's service allows telephone calls to be made over a broadband Internet connection using VoIP, voice over Internet Protocol. Operating on the Internet frees the service from government regulations and lessens the cost of phone service for consumers.
The company said proceeds from this latest round will go toward making its service available in new markets and developing new offers.
Venture capital firms 3i, Meritech Capital Partners, New Enterprise Associates and other previous investors participated. NEA led the round with $40 million. Vonage senior management also invested.
"With the latest infusion of capital, Vonage is poised to achieve its goal of becoming a billion-dollar business, leading the industry through its next phase of growth," Vonage Holding's chief executive, Jeffrey Citron, said in a statement.
The company is one of the pioneers in Net phone service, but many big-name telecom players, such as AT&T, are making moves into the emerging market. The market is expected to boom in the coming years as broadband technology gains acceptance and service providers accelerate their efforts to exploit the new medium.
Vonage has been leading the charge and is already working to offer new features to its telephony service, such as information about a city's amenities, to not only get ahead of VoIP competitors but to also match the services already offered by landline phone companies. The company has also been working with hardware manufacturers, including Linksys and Netgear, to make its service available to more potential customers.