Ooma sells the Telo handset for about $200 and provides domestic calling free for as long as customers own the product. The company also sells international calling plans starting at a penny a minute to about 60 countries. Ooma is roughly a 50-person Palo Alto‑based team. It raised another $17.3 million from existing investors and will use the funds to expand marketing. The company plans to reveal new product developments at CES. Total funding after this round stands at $83.3 million. Ooma offers a consumer electronics device that delivers HD-quality, free U.S. telephone calling and advanced telephony services to customers worldwide. The company recently launched the Ooma Mobile HD app, enabling U.S. and international calls from Android, iPhone, iPad and iPod touch devices. Its products are available at more than 4,000 leading retailers and online destinations. Ooma received an extended $3M in debt financing from MMV Financial. Founded in 2004 and based in Palo Alto, California, the company has emphasized expanding its marketing, sales and operations using the new funding, per President and CEO Eric Stang. Ooma launched two years ago as a consumer VoIP product that pairs relatively expensive hardware with a free voice service. The company’s business model initially proved confusing for consumers compared with competitors like Vonage, though customer reviews were very positive. Ooma has expanded retail distribution—Best Buy has been selling the devices and sales there are described as brisk. The company hired seasoned sales executive Rich Buchanan (previously at Sling Media) to boost go‑to‑market efforts. At CES the company announced a new handset called the Telo, which is not yet available for purchase. With fresh capital, management expects the company should reach profitability. Ooma is a Silicon Valley VoIP hardware startup that launched about fourteen months before the article and sells consumer VoIP devices. The company had been burning through its prior $26 million in funding and had lost some key executives. It tweaked its business model and expanded distribution beyond Amazon and its website into Best Buy stores. Ooma hired marketing executive Rich Buchanan from Sling Media and brought Tami Bhaumik on as VP Marketing to drive retail sales. There were earlier rumors the company took short‑term convertible debt from existing investors to stay afloat. The company is not yet profitable; the new funding is intended to provide runway to try to scale retail distribution and boost unit sales. Ooma is a secretive Palo Alto telecommunications company working on a home-focused product that reporting says would layer IP technology on top of a home’s existing phone network to let users access voice messages on any device. The company has labored for more than two years on the product while keeping its strategy largely confidential. According to reporting and a regulatory filing, Ooma has raised $12M of an $18M Series B round. Return backers include Worldview Technology Partners and Draper Fisher Jurvetson, and Sean Parker of the Founders Fund invested last year and later took a board seat. The company previously raised about $7.8M in a first round roughly two years earlier. Ooma has also experienced leadership turnover—reporting notes it lost Michael Cerda and its head of engineering, Spero Koulouras—and founder Andrew Frame is reportedly back at the helm.

Total raised

$62M

Funding rounds

5

Latest round

Equity

Latest activity

Jan 2012