Vonage Raising $100M
Seems there was some truth to that crazy rumor I heard about Vonage. A source today confirmed that the broadband phone company is currently in the market to raise $100 million at a $950 million pre-money valuation ($50 million shy of the valuation I originally heard).
When Vonage raised $105 million last August, it was valued between $500 million and $600 million, my source says. So, the company believes its valuation has almost doubled in just seven months. That's not inconceivable, considering Vonage's current growth rate: more than 10,000 net new subscribers a week, according to CEO Jeffrey Citron. Bringing in those customers requires a lot of expensive advertising, and not bringing them in means forfeiting them to big cable companies like Time Warner and Cablevision. Hence Vonage's decision to return to the private equity trough. It may not be the company's last capital infusion this year. My source says Vonage is contemplating an IPO by year-end.
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