VoIP startup Ooma has raised another $14 million in venture capital, we’ve heard from multiple sources, increasing the total amount of capital the company has raised to $56 million. This most recent round of financing was led by existing investor Worldview Technology Partners and was a restructuring that wiped out earlier investors who chose not to participate in this round.
The company was really on the ropes and down to its last few dollars, says one source. But sales, particularly at Best Buy, are brisk and the company should reach profitability with this new round of financing, he added.
Ooma first launched two years ago as a new type of consumer VoIP product. But a complicated business model (expensive hardware, free service) made it confusing for consumers to compare to competitive offerings from Vonage and others.
But customer reviews were very positive, and the company brought in seasoned sales executive Rich Buchanan, previously at Sling Media. Best Buy started selling the devices and have been very successful in moving them off the shelves.
The company also announced a new handset product called the Telo at CES earlier this year. It is not yet available for purchase.
I’ll bet the original investors are just pleased as punch. Even though the old stock was cleared of off prime retail shelves at a steep discount from the original into price, the model was flawed.
Tough time to compete in VOIP with funny hardware, and numerous skype phones that are supported by the CE giants.
These guys are going to face real serious competition coming up. This entire industry is just “made up” costs anyways- Sending some data from point A to point B is more a case of bandwidth vs the telco paying a fee which has to be passed down and the days of 30$/month unlimited phone plans will be here soon, driving even more of a nail in the “land line” coffin.
Regardless, I heard that “magic jack” which has sold ~3mm of the units is releasing a more expensive version waiving the yearly fee of 20$ but instead charging 100$ at purchase vs 19.95.
I purchased an Ooma last February after reading Mr. Arrington’s positive review of it. I’ll be honest; its a pain in the as* to port a number (with faxing and long time frames) BUT in the end it really is the best service I’ve had. Easy to set up, great toll quality reception. I forget that I have it sometimes, mostly because there’s no bill. The return on investment is quick (4.5 months in comparison to my Time Warner VoiP service)…
I’m really glad they picked up some more cash and hope they make it. Good Luck Ooma.
I own an Ooma for over a year now and its worked great for me. I haven’t had to worry about remembering to pay my phone bill. It would be nice if I can say the same for my mobile service.
After having had Vonage (terrible), SunRocket (disappeared overnight), Vonage again (still terrible), AT&T CallVantage (not bad, gone now), and then Ooma, I have to say – Ooma blew me away. I wasn’t expecting much from Ooma, but the call quality is far better than any other VoIP provider I’ve used – easily on par with wirelines. Prior to Ooma, I thought that inside wiring for my house might be bad, but it turns out it was just the service. The service is so good, I made the decision to port my number after just 2 days with Ooma.
If you are on the fence – get Ooma. You absolutely will not be disappointed.
I am coming up on 2 years with my OOMA…Very pleased. I knew it was gamble spending $400.00
but I ditched my landline at $40.00 per month…looks like I made the right decision. I felft that Ashton Kutcher might also kick in some $$$ to keep it afloat for at least a year or two.
When the do go out of business I just hope we can get our phone numbers ported…(I am a realist…they will die eventually).
We’ve been very happy with the Ooma at our office. We got it for less than $200 at J&R Music World, and the call quality and features are amazing. After 6 months, we’ve already recouped our investment vs. paying for monthly phone service. Works fine with our all-in-one printer/fax as well. Highly recommend it.
Got Ooma in December to replace Vonage — hope they stick around because once you stop paying phone bills there’s no going back.
I absolutely love my Ooma. I’ve had it for 6 months, with very little issues, besides that one outage reported on Techcrunch.
I’m another very satisfied OOMA customer. I’ve had it about a year and it’s been fantastic. It simply works – no crashes, no problems. I was worried that my flaky internet service would be a problem but it hasn’t proven to be much of an issue. The one time where it was, the ooma service still functioned such that I received voicemail during the outage.
On the other hand, those who have complained that number porting is a pain… well, they are right. Not sure why it’s so much harder to port to OOMA then it was to port a cell phone number between carriers – but it is.
D’oh!
Excited about Ooma, I called Best Buy to see if they were in stock. They were.
And then I noticed the Ooma Telo… which is prettier, feature-ier, more polished, and means I don’t have to buy a bunch of cordless phones.
Well here’s a little scoop for you, TechCrunch readers. While the Telo was first announced at CES 2009 and supposedly would launch “first half 2009,” Telo customer support said the following in an e-mail to me:
1. There is no planned upgrade path for recent Ooma purchasers to the Telo hardware.
2. Telo pricing has not yet been decided.
3. Telo’s launch will be “mid to late 2009″
Bummer.
I have had ooma for many months now maybe over a year and it has great call quality and pays for itself. I love this thing bought them for all my family Skype vonage and magi jack suck compared to OOma its built on voice before data packet filtering so its great quality and does not slow down internet
Ooma is amazing. I love getting notified of voicemails via my blackberry and email. It’s like having my company’s cisco phone system at my house. I am impatiently waiting to get my hands on the ooma telo and give my old core to my parents. It should only be a few more months…
I just bought Ooma and will join their Premier service for the first year. Those of you who like Ooma, why don’t you join their Premier service for $99/year or $12.99/month. That way you will enjoy more features and they will be there longer to serve all of us.
ooma=basura
Just performed a 2 week eval on a cable 8 meg down/512 up service.
Call quality was not acceptable for home office use.
Pulled it, repackaged, returned it to costco.
Reinstated VOIP with ISP.
RIP OOMA.
Well too decided to go for the Premier service and I must say it’s not bad at all. There were a few glitches along the way but none that were deal killers. The number porting went just as promised and now I’m only paying half of what I was paying AT&T. I can’t wait to see what new features they add next year.