RealTime IT News

Money Still Making Vonage Go Round

Vonage has tucked an additional $250 million in private funding from previous and new investors into its coffers, bringing the total funding war chest of the Internet-based phone service start-up to $658 million.

The Holmdel, New Jersey-based company, which has more than 1 million customers and is the nation's largest provider of phone service that sends calls over Internet, plans to use the money to develop its network throughout the United States.

The company also said it would deploy enhanced 911 services to provide emergency-calling capability to customers.

Last month, Vonage failed to meet the Federal Communications Commission's (FCC) mandate to provide full E911 by Nov. 28 or cease marketing Voice over IP.

In recent months, Vonage has reportedly prepared to file paperwork for a $600 million IPO, a move that illustrates the rapid ascension of VoIP from niche to mainstream in just a few short years.

Vonage Chairman and CEO Jeffrey Citron said the latest round of funding validated growth in the VoIP market, adding 16 new investors, "which proves the financial community is confident Vonage is executing on our strategy to redefine the way people communicate, having already shifted the telecommunications landscape to an IP-based world."

This latest round of funding was spearheaded by Bain Capital, with Citigroup, UBS and Deutsche Bank serving as financial advisers to Vonage.

Also participating in the funding were existing investors New Enterprise Associates, Meritech Capital Partners, and senior management.