Vonage Awash in Venture Capital
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VoIP (define) upstart Vonage has quickly amassed another $105 million from venture capitalists and is looking to Latin America and Asia to accelerate an already torrid growth rate.
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Swarming to the next new thing Over the past four years, venture capitalists have tossed huge amounts of cash at "green-tech" startups. The green, er, field has become saturated with speculative funding, rivaling even the two mainstays of Valley vulture capitalists: IT and life sciences.â¦
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Asks if provisions for 'workaround' are appropriate The black clouds that for the last three months have been hanging over VOIP service provider Vonage parted ever so slightly today, allowing through the tiniest sliver of sunshine as a federal appeals judge raised the possibility of a compromise in its patent war with Verizon.â¦
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Vonage, which helped popularize Internet telephone calling, faces brutal competitive pressure from bigger telecommunications players.
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Vonage has teamed with NETGEAR Inc. to develop a suite of broadband telephony devices incorporating the latest version of Texas Instruments&#39; VoIP and WLAN chipsets.
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Even though its fundamentals are improving, including a narrowing loss, VoIP provider Vonage is beginning to feel the sting of competition, as subscriber growth is beginning to stall.
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The cost of Vonage's VoIP technology development policy - build now, ask questions later - hardened a bit more after the close of stock trading this afternoon. Vonage has agreed to settle with the first of its three aggrieved parties, Verizon, in an unusual deal that hinges upon a forthcoming ruling from an appeals court and a separate injunction ruling from a district court.
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Vonage HoldingsÂ on Tuesday announced it has partnered with two companies to offer wireless telephone handsets for its VOIP (voice over Internet Protocol) service.
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Internet phone service provider Vonage  Holdings Corp.  on Monday said it has been served with a  patent infringement lawsuit filed by two units of Verizon  Communications Inc. .
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Announcements by Vonage, Net2Phone, Boingo underscore collision course of Internet telephony and wireless broadband.
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Two startups, and not the better-known Skype, are making a splash with mobile voice-over-IP capabilities.
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U.S.-based venture capital investments reached their highest point last year since 2001 with software remaining the strongest category, according to The MoneyTree Report, released this week by PricewaterhouseCoopers and the National Venture Capital Association (NVCA).VC firms sunk some $29.4 billion into 3,813 U.S. deals in 2007, according to the report.Software-related VC funding once again received the most money with $5.3 billion, compared to $5.1 billion in 2006, according to the report, which used data from Thomson Financial.VC spending on other technology categories also rose. Funding for computer- and peripheral-based interests was $580 million, up from $497 million in 2006; IT services, $1.3 billion, compared to $1.1 billion in 2006; networking and equipment, $1.25 billion, compared to $1.1 billion the previous year.However, semiconductor VC investment fell to $1.85 billion, from $2.14 billion in 2006. Telecommunication also saw a slowdown, falling to $2.14 billion, compared to $2.6 billion in 2006.While the VC market has hardly bounced back from its boom year -- 2000, when spending stood at $105 billion according to NVCA -- it has slowly crawled back to life. A low point came in 2003, when VC investments were a mere $19.7 billion, NVCA data shows.Major software vendors employ varying strategies toward the VC market. While some companies, notably Sun, infuse cash into startup companies through funds of their own, others, such as IBM, take a different tack, working with VC firms to analyze their portfolios and spot companies that could be potential future partners.&quot;We&#39;re not in the venture investment business,&quot; said Claudia Fan Munce, managing director of IBM&#39;s venture capital group and vice president of corporate strategy.&quot;The due diligence process today is much, much heavier,&quot; Munce remarked of the current climate. But as the report&#39;s numbers indicate, venture investing is far from dead. &quot;They&#39;re coming back in a very different way. They&#39;re not just looking at Silicon Valley,&quot; Munce said.According to the study released this week, U.S.-based VCs invested $1.1 billion in India and $1.4 billion in China, record highs for U.S. investments in those nations (The numbers are not included in the study&#39;s aggregate totals, according to PricewaterhouseCoopers.).
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Troubled VoIP service provider Vonage is rolling out new products and services at the Consumer Electronics Show in a bid to reverse its downward spiral.Intellectual property lawsuits brought by Nortel, Verizon, Sprint, and AT&amp;T have distracted Vonage for the past year. During that time, customer acquisition slowed, and defections grew to 3 percent in the third quarter last year.But Vonage says it is ready to turn a corner. The suits were a weapon that the phone companies used to defend their businesses in the face of competition from Vonage, said Jeffrey Citron, chairman, chief strategist and interim CEO at Vonage. &quot;It was a successful strategy. It distracted us and slowed us down,&quot; he said. &quot;Instead of rolling out MyVonage six months ago, we were dealing with workarounds.&quot; MyVonage is the name of a new campaign at the company to introduce a host of services geared toward customer lifestyles.While the lawsuits were ongoing, the company was developing workaround technology that would allow its business to move forward without infringing on the relevant patents. Vonage has now settled all four major lawsuits against it.That has left Vonage free to spend more time focusing on its business, said Citron. It hired new engineers who designed a router, the first time Vonage will sell its own router rather than one from Cisco or Motorola.The router has an unusual feature: a screen. It displays information about problems that the modem might have in plain language. For instance, rather than showing a flashing light like most routers, this one displays words telling users that the Ethernet cable is unplugged.New customers will be able to buy the V-Portal router online starting Wednesday for $9.99 after rebates.In addition to the new router, Vonage is beginning to roll out many new features that it is showcasing at alpha.vonage.com. For instance, customers can now use voice-activated dialing, simply speaking a name to place a call. Customers can also send a voice message to anyone via e-mail. The message arrives as an attached audio file.Call blast is a new feature that lets customers send out a voice mail simultaneously to a group of people. Citron anticipates that will be useful when he&#39;s in charge of calling 15 kids who go to school with his kids to tell them there is a snow day.&quot;We expect to roll out a new capability every month or two,&quot; Citron said.Vonage also plans to offer another service that lets users access the voice recognition system from any phone to make a call through Vonage. The company is also testing software that would let customers make Vonage calls via software on their laptops.Many of these services are free to Vonage customers.Citron said that the future for Vonage will be brighter. Despite continued high churn, last quarter it had a gain of 77,000 customers, which he says isn&#39;t as good as it should be. The company has worked to cut costs, and improvements in customer service should help decrease customer losses, he said.In the meantime, speculation continues to circle that the payouts Vonage made to settle the lawsuits will cripple it. But Citron was confident that the company&#39;s troubles are behind it.
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Troubled voice-over-IP provider Vonage is rolling out new products and services in a bid to reverse its downward spiral.
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(InfoWorld) - A federal court ruled on Tuesday that struggling VoIP provider Vonage infringed on patents owned by Sprint Nextel. Jurors in the U.S. District Court in Kansas found that Vonage willfully infringed on Sprint's patents as part of its VoIP service, Vonage said. The jury awarded Sprint $69.5 million in damages, which amounts to 5 percent of Vonage's revenue during the infringing period. Vonage plans to initially ask the court to set aside the verdict, but if that fails, the company will appeal the decision. In the meantime, Vonage will also develop workarounds that don't require Sprint's patents, it said. This is the second legal blow to Vonage this year. A court found earlier this year thatÂ Vonage infringed on Verizon patents. That case came with an injunction that would have prevented Vonage from signing up new customers.Â Vonage won a stay of that injunctionÂ and is appealing the original infringement ruling. Although it's clearly bad news for Vonage to have two patent infringement rulings against it this year, the appeals could change everything, said Seth Ostrow, a partner specializing in patents in Dreier LLP. "Often there are mistakes made during various stages of a case that form the basis for a successful appeal, and that, coupled with the statistics, gives reason to think that Vonage has a significant chance of getting this changed," he said. Statistics show that patent cases often get changed on appeal, he said. In August, Vonage said it had nearly completed rolling out workarounds for two of the three patents claimed by Verizon. Still, the Verizon case alone appears to have slowed growth for the company, the largest independent VoIP provider. In its second quarter this year, Vonage added 57,000 customer lines, compared with 256,000 in the same quarter in the previous year. Vonage has said that Verizon pursued the lawsuit in an effort to eliminate a competitor. Vonage stock opened the day at $1.99 and closed at $1.20, a 33 percent drop. This story was updated on September 25, 2007
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- Internet-based calling company Vonage Holdings  Corp  said it settled a patent dispute with Nortel.
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Jaxtr is the latest in a new crop of VoIP start-ups that is attracting venture capital.