Silicon Valley VoIP startup Ooma, which launched Fourteen months ago, was having a wee bit of trouble these last few months. They lost some key executives and were steadily burning through their $26 million in funding (hardware can be expensive, we hear). If rumors were correct, they were taking short term convertible debt financing from existing investors to keep the doors open.
Things started turning around a little for the company earlier this year. They tweaked their business model and got their devices into physical Best Buy stores, expanding their distribution channel beyond Amazon and their website. They also hired hot shot marketing guru Rich Buchanan to the team from Sling Media. Buchanan is the guy that led the Sling marketing team to sell 100,000 units in its first six months of operations, and 500,000 units as of mid 2008. Buchanan brought Tami Bhaumik with him from Sling as well, who is now Ooma’s VP Marketing.
And today they got a new round of financing – $16 million from existing investors Draper Fisher Jurvetson, WorldView Technology Partners, Founders Fund, WI Harper Group and Draper Richards. New investor Telecommunications Development Fund (a venture capital fund whose board includes the Chairman of the Federal Communications Commission) also joined the round.
Will the $16 million be enough to get Ooma to profitability? Nope. But it may give them enough runway to let Buchanan do his thing and see if he can move Ooma units at Best Buy and other retailers, just like he did with the Slingbox. Don’t count Ooma out just yet.
Good luck. Hopefully they will win this battle and become financial stable.
It’s a good idea but I have the feeling the winners will be whoever buys Ooma’s assets out of Chapter 11.
Congratulations to Ooma for being able to raise new capital. Hope they grow from strength to strength.
Another sure winner – oh, wait, it’s the same failed hardware based VOIP strategy with an insurmountable wall of embedded competition.
No it is not. There is no service and no servers running the show behind the scenes. All is self-contained within the units. If you’re going to be snarky, at least understand what the hell your talking about.
That’s a staunch and vigorous defense of an off brand appliance! What do servers have to do with anything? Any multi-hundred dollar device that presents this barrier to entry while there are numerous other voice service (free, cheap, software, incumbent voice carriers, new as yet unnamed services, etc.), is a bad investment.
unless they slash the price to PC phone jack levels of 19.99 !
Good invester, hope that money will comeback.
What a bunch of insipid fanboy comments.
If you used it and saw how well it worked and how little it costs you too would be a fanboy.
Congrats to Oooma. I’m for sure glad that they got more funding. I have been using their service for almost a year and I am very happy with it. They had a couple of glitches with the billing for Int’l calls but nothing that their support team was not able to rectify.
I certainly like not having to give my money to Verizon anymore.
I’m buying one. Anyone else?
I keep thinking about it. But I worry about putting down the cash only for the company to not pull through. Of course, by buying one, I’d be supporting the system but I’m still not sure.
ditto, i think i’ll go to best buy and get one today.
there domain name hurts which could be a death sentence. thats all we need is another domain name you need a user manual or tech geek to tell you what it does. maybe these guys need to go back to the jungle and put the name back where they found it. we are civilized society.
LanguageLocator.com
I’m a very happy Vonage customer. I’d never switch to Ooma… at least Vonage provides some kind of a QoS… this layer 7 P2P stuff is highly unreliable.
you are smoking crack
there are happy vonage customers? I’ve been a pissed off vonage customer since 2003ish.
HA! Again, classic. There commercials are amusing, but I’m always wary of a company that has to go at length to show exactly how much better they are compared to a specific rival. It spurs me to investigate what exactly they are offering more closely.
I used Vonage for a long time. Always had problems. I have had Ooma for around a year and honestly I have never had a problem. It has worked beautifully and flawlessly. Never caused me any bandwidth problems. I would absolutely say Vonage was far more unreliable to me than Ooma.
I was a Vonage customer. Now I am a OOMA customer. I am very happy with OOMA quality and the service. Vonage quality was so-so and their service…, they were cheats. One more thing: OOMA has QoS Setting. (http://cp-ooma.....1136591&s=)
Wish I could raise that type of funding for my own company, lol. That’s a lot of money to burn. Voip is beyond what I do, but it is a very interesting realm to dig into. I wish them the best of luck.
WHY? Why would all these investors, historically smart venture funds, invest in a a down trodden, already dated technology that can be had, for the most part, FREE from providers like magicJack?
OOMA does not even have its own calling network. Wow, that Ashton Kutcher can really “punk” the money people.
magicJack isn’t one tenth the phone system Ooma is. Try it out and get your facts straight before you post bs like this.
Congrats to the Ooma folks! No one I know thinks that traditional handsets are any good, and everyone who has an Oooma seems to really like it.
hmmm — what is Ooma? I don’t think the article says, other than it’s some sort of device mfr….
What do you think the link to crunchbase is for?
It has all the info there if you have only been reading this blog for a little while (most of us know what ooma is, and 50 of us got free ones over a year ago).
This company is swinging for the fences, let’s give them some love. I’ve had the product for 5 months and it’s a superb experience in every way. Go ooma!!!
Great service. Bought from Best Buy to replace my skype handsets. Couldn’t be happier. Reliable, nice features. Skype hardware is the worst. My trial for Ooma’s premier service ran out. I’ll probably renew at 12.99 per month to show support. Hope they stick around. Either way, it was worth the $249 gamble and I’ve certainly gotten great use out of it.
A phone that you can’t take to the coffee shop??? {seesmic_video:{”url_thumbnail”:{”value”:”http://t.seesmic.com/thumbnail/b1i8RNmOD1_th1.jpg”}”title”:{”value”:”A phone that you can’t take to the coffee shop??? ”}”videoUri”:{”value”:”http://www.seesmic.com/video/aysTxFEUdG”}}}
But some of us live in geographic areas where cellular technology still doesn’t cut it. My cell phone works well in town but not at my home.
Andrew, do you live alone? The one phone method doesn’t work for families.
Andrew you give Andrews a bad name. Too post such a closed minded video without thinking of the various needs it fulfills is just ignorant. I have a phone in my house that costs nothing that saves me minutes on my cellphone. And i can have multiple people in my house on the phone at the same time. Plus I can give out the number as a straight to voicemail number that gets messages sent straight to my iphone so I don’t have to give out my cell number to everyone. Plus I have a dedicated fax line that i have attached a fax machine that forwards to my email. So I now have a free eFax type line that I pay nothing for every month. Just 50 bucks for the fax that forwards to my cell and gives me hard copies at home. This service is fantastic. Maybe not for some guy in his 20s that lives by himself (although the fax is great for him too). Don’t be so closed minded. Next time try and think of other applications for it other than whats right in your face.
Would rather continue to pay Vonage $15.99 per month and use my cell phone as my primary phone. The only reason we eve have Vonage is for 911 purposes.
This may be a classic case of throwing good money after bad. Unless, they have experienced hockey stick growth in the past quarter. No new investors leading the round equals DOWN ROUND.
They started off on a bad foot, bad private rabbit hole beta, first PR was about Ashton Kutcher is on their board. For me personally I wouldn’t mind having this service but the design factor is an issue. Why did they not go all the way and make a full on desk phone. You have this beautiful silver piece of hardware and I have to plug this into a black ugly desk phone?
They need help getting the word out and repositioning their brand.
I think they need to work cheaper and better this time …coz this well might be their last time …..may be a outsourcing to india and china can help !
I have had Ooma for a year after using practically every other VOIP service. Ooma is hands down the best. I absolutely love the Ooma device and hope to see it thrive. And for the morons that are saying this device is outdated they have never used it. The calls are crystal clear. My voicemails are forwarded straight to my iphone and I have a free dedicated fax line. This is hands down the best phone service out there and it is also the cheapest. As for the rest of the article, I also love the Slingbox. It is another fantastic device. But if you think them selling so many Slingboxes had anything to do with Rich Buchanan you are sadly mistaken. There were thousands of us talking about a device like this on forums and message boards before it came out. All any marketing exec had to do was release a simple press release and post the website on a single message board and the device itself would spread like wild fire. Slingbox sold itself because it was the only device of its kind at the time. Rich Buchanan was just in the right place at the right time. And if you ask me his marketing of the device was poorly done. I have friends and family that now use the device and love it but never heard of it anywhere until I showed it to them years after it came out.
I just switched from Magicjack (been with it for 1 year) to Ooma…what a difference! I even tried skype for a bit. No comparison to Ooma. Well worth the extra $200! Buy.com has it for $230 shipped.
That’s right except if you live in NYC, Buy.com is now charging sales tax which is at 8.375%. What a bummer.
I think there is one very important aspect that we are all forgetting here. Everyone wants to keep saying, “why should I buy an Ooma when I can just use my cell phone?” Has anyone been looking at the studies dedicated to excessive cell phone use and cancer? I don’t know about you but I don’t want to use my cell phone anymore in my home if I don’t have to! Multiple stidies have linked brain cancer and cell phone use. Hello, Look at Johnny Cochran! Dr. Mehmet Oz said that the reason there aren’t any studies on this being made public is because the cell phone companies don’t want them to be made public! Why would they want to kill their cash cow! I guarantee in the next 10 years they will start telling people to limit therir cell phone use in the home and ato always use a hands free device! Ooma should look up these studies and use them in their marketing!
Does anyone know that Ashton Kutcher is the Financial backer behind OOMA? Best of luck!
Good luck to ooma! They did a great job blowing through the first millions, what’s a few more here or there? They sure have downsized their operation (they were twice the size last year), they wiped out their entire web development team. I will give them credit, they do have an excellent product. However, with a CEO that changes his mind on a weekly basis, I don’t expect to see them last into mid 2009.
Keep in mind, for ooma, this funding is NOT much. I heard they’re blowing almost a million/month. So, by buying themselves out of debt, that’s not even a full year of funding. I encourage Rich to pull them out of this one. They’ll have better luck being bought over.
As for the Ashton Kutcher comment. He’s just a name on their books for publicity. Ask anyone at ooma (other than the CEO) if they’ve met him, worked with him, or have even talked to him and they’ll give you a big “NO”.
For current customers, enjoy your free calling ( not free if you want features, then it’s $12.95/mo) while you have it because when they tank, you’ll have to find something else.
GOOD LUCK!
I have ooma for 6 months now. I love it, The sound quality and service is great and best of all, it already has paid for itself. Now I save 48.00 a month. I hope they stay around many years. PS they just added call forwarding and a Call log today.
Congratulations to Ooma .
I have had OOMA for more than ayear and no problems. It works well and I recommended OOMA to my friends. I prviously had Vonage, Sunrocket, Packet8, skype, and my own asterix server. Ooma is not perfect, but I do not know of any telephony that is.
Just bought ooma today from Amazon for 199.
Been using OOMA for over a month now. I ported my phone # from Vonage. I’ve also used Packet8, SunRocket, Viatalk & Magicjack. OOMA is just as good as Vonage, and better than the rest. It also passed the wife test in my house. No more phone bills at home!
I bought Ooma from buy.com for $195 last month. I finally plugged it in last week. It took about 5 minutes. It’s great! It’s better than paying $40/month for land line. Payback is after 5 months. I definitely recommended it!
Ooma recently placed limits on their “unlimited” calling. The lied to us. They now charge for usage over 3,000 minutes per month. Even Skype so-called “unlimited” is 10,000 minutes per month and only costs $3 per month. http://stealthi...inutes-per.html
I used Vonage and Lingo for 3 years each. Now I am OOMA customer and the quolity and realibility of OOMA is far superior. I love the price too:)
Love Ooma. Have an eight extension 2-line phone system. Have a concentration of relatives in a remote area code. With Ooma, those folks call my family, out of the area for free. Us old school types want to call a traditional “house” number. Since everyone in the house is family, we like using the excuse of calling the house phone rather than the INDIVIDUAL cell phones so we can catch up on what’s hapening with whoever randomly picks up. It’s a cultural thing. Our house has an identity of its own. That’s why we call it our home.
Ooma is essentially another ponzi pyramid scheme where you buy in hoping that people after you buy this device. I’ve had mine for over a year, but I am not sure that I would buy this device just now. Eventually, you will have millions of users and their servers will eventually fail unless they have enough money to add more servers.
I am buying an ooma, and have it on hold for me at Best Buy right now. They price matched the Amazon price of $199.99. I figure that even if they only last another four months, I’ll still break even in relation to my current cost with my land line. I know several people who had nothing but trouble with Vonage, so I was reluctant to go there. Magicjack requires you to have it plugged in to a computer all the time, so that wouldn’t work for us either. Where we used to live, we just had our cell phones, but we now live in a rural area, and if a tower goes out, which it did last year, we loose our phone service completely till they fix it – it took about a day and a half. I have a kid with asthma and allergies, so I need a back up for 911 service if our cell phones are out. Ooma seems to be the way to go for that. We have E-911 in our area, so it should be better than calling from our cell phones if need be. $50/mo. is a lot for 911 back up. I’d much rather gamble on saving $$ with ooma, besides I have 30 days to try it out, and can always return it if it doesn’t work out.
In my case I have to maintain a land line for my work. I admit I don’t use it half as much as my cell phone and in fact the number is usually forwarded to my cell phone. But what is good is when my cell phone rings my OOMA phones ring at the same time and I can choose to take the call on the home phone. It’s a great clear system for the house and the calls are all free.
Switched from Vonage to Ooma. Have it for a bit over a months now. Could not be happier. Call quality is better, no more dropped calls in the middle of my long conference calls, it is just better than Vonage ever was. Yes, they may not be around forever and anyone concerned about that should just buy their Ooma unit at Costco, they usually take them back if not satisfied, even after a year or more.
I’ve bought 2 of the Ooma units and they work great at home and the office. Your computer does not have to be on all of the time and the call quality is excellent. Ignore the comments from the people that have not actually used it. The MajicJack is not in the same class at all. Ooma is a top notch quality product.