SunRocket, a Vienna-based company that has quickly become the darling of the Internet phone industry, has secured an additional $33 million in investments, representatives from the company announced Friday. The new infusion of funding, which is on top of a nearly $50 million Series B round of financing, signals the local company’s potential for breakout success, investors said.
“SunRocket has nearly tripled its subscriber base in 2006 in tandem with an explosive yet still nascent residential VoIP market,” said John Malloy, general partner with BlueRun Ventures, one of SunRocket’s original investors. “This momentum demonstrates that SunRocket is hitting its stride at an ideal inflection point when mainstream consumers are beginning to embrace Internet phone service in record numbers.”
SunRocket — the second fastest-growing Voice over Internet Protocol provider next to New Jersey-based Vonage — launched in mid-2004 and now has about 135,000 subscribers to Vonage’s 2 million. SunRocket — which now offers its services in nearly all major U.S. cities — projects it will have at least 300,000 subscribers by the end of the year.
Vonage remains ahead of SunRocket, but investors are looking to the fledgling firm as Vonage attempts to recover from a disappointing initial public offering and recent slips in the stock market. Meanwhile, SunRocket — which was founded by former MCI executives — has pumped money into increasing its customer service, including opening a customer care center earlier this month in Missouri and accelerating its product development.
Several new investors jumped on the SunRocket bandwagon for its Series C financing. Washington-based venture firm The Grosvenor Funds, Varma Mutual Pension Insurance Company, which is the largest private sector pension insurer in Finland, and Bru Venture Capital, a private equity and venture firm based in Iceland, all contributed to the round, along with existing investors BlueRun, Mayfield Fund, DCM and Anthem Capital Management.
“As consumers grow increasingly comfortable with VoIP as an alternative to traditional home phone service, this is an opportune time to invest in the U.S. Internet phone service market,” said Risto Autio, head of private equity investing at Varma. “We fully expect that SunRocket’s innovative approach and seasoned leadership team will enable the firm to pull away from the competition and emerge as a winner in this space.”
