Doug on IP Comm » venture capital

VC looking for security — those that are left

Doug Mohney — Thu, 29 Oct 2009 16:02:27 +0000

VC firms — those not cleaned out by the dot.bomb crash of 2000-2001 and the Great Recession — will be looking to invest in security companies in forthcoming funds. What with all the data breeches, stolen credit cards, and cyberwar battles across Eastern Europe over the past three years, better tools and systems are needed for such initiatives such as online health care and banking.

However, there won’t be massive hordes of firms looking to hand out money to anyone with a PowerPoint and a good idea. There will be fewer funds (see: Great Recession of 20xx) and the (mostly old-money) survivors are back to fundamentals of business plans, profitability, and investment horizons of 5 to 7 years.

ooma gets more cash

Doug Mohney — Tue, 23 Jun 2009 14:03:59 +0000

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.

Telesphere scores $15 million VC money

Doug Mohney — Wed, 27 May 2009 12:25:27 +0000

Phoenix-based Telesphere received $15 million in another round of venture funding from its trio of investors. The hosted IP PBX company plans to use the cash for acquisitions and to expand its footprint beyond the 44 states it currently operates in.

In 2008, Telesphere received $10 million in funding from Telesphere’s investors are Rally Capital, Hawkeye Investments, Greenspun Corp; the former two are firms out of Washington state while the latter is based out of Nevada.

Telesphere says its revenues grew about 60 percent in 2008 and has about 120 employees; up from 35 at the start of 2008.

Providing services to the small to medium-sized business space, Telesphere provides various hosted IP PBX services and delivers service over a leased line. Options include SIP trunking and providing all the hardware and software for phone service.

Question of the day: If Telesphere is buying, then who is available and worth the price? There are a number of strong independent SMB VoIP providers – 8×8 comes up as a prime example – who have positive cash flow and no burning desire to be bought.

Source: Arizona Republic