ooma gets more cash
Posted June 23, 2009on:
TechCrunch says ooma has raised another $14 million, for a total of $56 million in VC money raised over the course of the company’s history.
Leading the round was Worldwide Technology Partners. and the deal reportedly wipes out (probably dilutes out) the other investors. TCrunch says that ooma was “really on the roaps and down to its last few dollars,” but sales at Best Buy are rockin’ and the company should reach profitablity with the newest round of financing.
No doubt ooma was really screwed up at first launch. The gear was too expensive ($399), the consumer message was confusing, and there was way too much Ashton Kutcher in the picture.
New management was brought on about a year ago and earlier this year CMO Rich Buchanan told me the company can’t ship product fast enough. Buchanan is a big thinker and ultimately envisions selling millions of the units per year through outlets like RadioShack. It’s a different mindset from the business VoIP community, for sure.
At first glance, I thought the ooma concept was a bit nuts, but when you walk through the business model — pay for the gear up front, around 5 years of phone service are baked into the price, make money off the value-added services and hardware upgrades — it starts to make a whole lot of sense. There is a lot of processing firepower built into the ooma device (Linux-based OS with Asterisk on top) and the second generation Telo will support HD through G.722.
Consumer retail is the first distribution path for ooma, but there are some interesting plays to be made with white label (cable companies offering HD voice, anyone?) and the always-looming SMB market.