The story
Min-X.com was founded by Jeff Pulver in 1998 as a Voice over IP (VOIP) exchange. He recruited Jeffrey A. Citron and Carlos Bhola, who each invested $1 million and joined as board members. Citron and Bhola then raised approximately $11 million in additional funding, pivoted the company to being a VOIP service provider, and Citron took over as CEO and Bhola as President. The company changed its name to Vonage Holdings Corp. in 2001. When the name was changed the company was located in Edison, New Jersey. In 2005, the organization relocated its headquarters to Holmdel, New Jersey. Pulver left the company in 2002 to start another VOIP venture.
The company first offered subscription service in the United States, then expanded to Canada in 2004 and the United Kingdom in 2005. Vonage went public on May 24, 2006.
Initial public offering
In 2006, in preparation for an initial public offering, Michael Snyder, former president of ADT Security Services replaced Vonage co-founder Citron as the organization's CEO. Citron could not preside over the IPO because he was permanently barred from associating with any securities brokers or dealers. In 2007, in a restructuring effort to reduce ongoing net losses in the face of double-digit stock price slips and patent infringement issues, Snyder resigned, and Citron returned as interim CEO. The company announced plans for 10% layoffs as it secured $215 million in financing.
Vonage offered shares of its stock to its existing customer base in the period before the initial public offering. Under normal circumstances, only large institutional investors such as banks are able to buy shares of an IPO. Vonage's initial public offering occurred on the New York Stock Exchange on May 24, 2006, opening at $17 per share. The price closed at $14.85, a decrease of 12.7 percent, the worst trading day for any IPO in 2006 up to that point. The IPO raised $531 million for the company. However, the existing customers who lost money filed a class action lawsuit. The IPO and its immediate aftermath also earned Vonage a Business 2.0 Magazine award as 14th of 101 Dumbest Moments in Business for 2006. In 2009, Vonage reached an agreement with the IPO investors. All shareholder claims against Vonage and its individual directors and officers who were named as defendants were dismissed. The amount of the settlement, $3.6 million, was paid by an insurance policy covering the directors and officers of the company.
The firms underwriting the IPO, Citigroup, UBS, and Deutsche Bank, were fined a total of $845,000 and ordered to reimburse customers for "failure to adequately supervise communications" with investors. NYSE regulators went so far as to investigate possible short-selling.
Acquisitions
Beginning in 2013, Vonage acquired several companies as it refocused its business from a home phone provider to a global business cloud communications provider, including:
Vocalocity, a software as a service (SaaS) provider of cloud-based communications services, for $130 million;
Telesphere, a unified communications as a service (UCaaS) provider to large companies, for $114 million;
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iCore Networks, also a UCSaaS provider to large companies, for $92 million;
SimpleSignal, another UCSaaS service provider to small and medium-sized businesses, for $25 million;
gUnify, also a cloud-based communications service provider to businesses (price not disclosed).
Nexmo, the 2nd largest CPaaS company, for $250 million;
TokBox, a WebRTC programmable video provider, for $35 million.
NewVoiceMedia, a Contact Center as a Service (CCaaS) provider, for $350 million
Over.ai, a Voice and Conversational AI provider for enterprise communications
Acquisition by Ericsson
On 22 November 2021, it was announced that Vonage would be acquired by Ericsson in a US$6.2 billion all-cash purchase. The acquisition was completed on 21 July 2022. According to the press release, Ericsson acquired all of Vonage's outstanding shares at an all-cash price of US$21 per share, a 28% premium.
The acquisition was financed through Ericsson's existing cash resources, which amounted to SEK 88 billion as of 30 September 2021 on a gross basis, and SEK 56 billion on a net basis as of the same date.
Vonage became a wholly owned subsidiary of Ericsson but continues to operate under its existing name and reported as a separate segment in Ericsson accounts. Vonage's employees remained with the company and the Vonage CEO Rory Read joined the Executive Team of Ericsson, reporting to CEO, Börje Ekholm.
In February 2024, Niklas Heuveldop was appointed Head of Business Area Global Communications Platform, a new Business Area within Ericsson, and CEO of Vonage. He was replaced in August 2026 by Christophe Van de Weyer.
From Wikipedia’s article on Vonage, shared under CC BY-SA 4.0.6