Vonage gets $105 million

Just caught this over at Om’s blog…

Vonage, in a bitter feud with AT&T’s CallVantage and other VoIP service providers raised a whopping $105 million Wednesday, bringing its total VC funding to $208 million. Incidentally that’s $8 million more than the amount earmarked by AT&T to promote its VoIP services. To fans of World Series of Poker, this will look like a master bluff. With around 240,000 customers Vonage for now seems to be the largest consumer VoIP provider. Using those metrics, venture capitalists have put a value of $867 per customer. Or about 29 months of premium package of $29.95 a month. [Om Malik on Broadband]

I hope Vonage does not push through with the $50-70 Million reported ad campaign. They’ve got the lowest brand recognition of any phone company and are quite small. It’s unlikely that they’ll be able to pull off a Michael Jordan-esque stunt like Worldcom did pre-MCI.

In my humble opinion, they’d be much better off continuing their online marketing assault coupled with some solid Direct Response thinking and execution across Direct Mail and possibly some DRTV. 50 – 70 Million though usually means brand campaign and given the marketing purse at ATT they’ll be working pretty hard to go uphill. Let ATT establish the category (even though Vonage was first, ATT is a bigger brand to the masses) and they track where the Call Vantage adds are running and quickly move in with some targeted messaging.

ATT was able to book some time during the Olympics for Call Vantage… The budget for Vonage won’t be able to go head to head in that way. Be smart and focused. Get that aquisition cost per customer down!

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