US communications company Vonage's Israeli development center will move from Ra'anana to the Alon Towers in Tel Aviv this summer as part of its expansion from 60 to 150 employees, the company told "Globes." The company had only 35 employees in Israel up until the middle of last year. The new announcement follows the appointment of Sagi Dudai as the company's global CTO, showing Israel's importance in Vonage's expansion plans.
Vonage, which develops network-based communications solutions, has grown impressively in recent years, boosting its market cap to $2.52 billion as of web posting. This is not the company's peak, however; Vonage's market value for its May 2006 IPO on the New York Stock Exchange was $2.65 billion - $12 a share. The subsequent years were very bad - Vonage had 2.5 million home customers in 2008, but the company was hit hard by the rise of smartphones and the economic crisis. By July 2009, its share price was only $0.34, and the company's revenue declined consistently until 2013.
This situation led to Vonage's inclusion on lists such as the "five worst IPOs of all time" and "eight unforgettable IPO disasters." These overwrought descriptions went too far. Vonage's share price has stabilized since 2013, its revenue has grown substantially, and the company is managing to achieve modest annual profits, although these have been gradually eroded, and the company even posted a net loss in 2017.
"Vonage is a transformation story," CEO Alan Masarek told "Globes." He came to the company in 2014 from Google, to which he sold Quickoffice, a mobile office applications company he founded. "What attracted me was the challenge of taking a brand that enjoyed a high level of awareness, especially in North America; the company's assets - we serve 50 billion minutes of phone calls a year - and the large cash flow generated by this business, and using all this to create a change. In 2013, after six years of decline in revenue, our stock of cash was deep enough to bring about a change through acquisitions."
Published by Globes [online], Israel business news - www.globes-online.com - on March 27, 2018
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