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.