Pluribus Networks, a startup you’ve probably never heard of, just put itself front and center in the race for a hot new market called “software-defined networking.” And it’s all because of Yahoo founder Jerry Yang.
Last week Pluribus raised a hefty $US50 million in investment, which brings its total funding to date to $US95 million. That makes it one of the best funded SDN startups ever.
SDN is a new way to build corporate networks. It shifts all the fancy features that controls a network into software. You still need to buy hardware like routers and switches, but you need fewer of them and less expensive varieties. It makes corporate networks more flexible and less expensive, a boon for today’s cloud computing environments.
Over the past couple of years, before Cisco released its own SDN product, there were a whole bunch of startups working in this area, and they were being snatched up in acquisitions the second they came out of stealth. The frenzy was launched in 2012 when VMware bought Nicira, a startup credited with inventing SDN, in 2012 for $US1.26 billion. Then Juniper bought an SDN company called Contrail two days after it came out of stealth for $US176 million. F5 bought a startup called LineRate a mere 10 months after it came out of stealth. Even Oracle got into the action by buying a pair of companies in 2013 that helped it get some SDN game.
And then Cisco released its own, home grown SDN product (the Nexus 9000) which the company says is selling well. (Note: we’ll get an update on that when Cisco announces earnings on February 11.) And VMware shipped NSX, the product that came from Nicira, which it says is selling well — it’s got more than 400 customers, VMware said this week.
And Facebook released the Wedge, an SDN switch it uses in its own data centres. Anyone can take the design for Wedge, modify it for their own needs and order it from contract manufacturers.
Valley VCs were done with SDN, thinking the chance for a big exit was over, Pluribus CEO Kumar Srikantan told Business Insider. When it was time to raise money, he got nowhere with them even though Pluribus was selling well to some big-name customers like CloudFlare and Tibco, and Srikantan is well-connected in the network industry, as a former vice president from Cisco.
Enter Yahoo founder and investor Jerry Yang, who has invested in Pluribus and sits on its board. (He used to sit on Cisco’s board, too).
Since leaving Yahoo, Yang has bankrolled more than 50 startups, including Evernote, PlanetLabs, Scandu and Pluribus, through his firm, AME Cloud Ventures. And his successful bet on Alibaba is as legendary in Asia as it is here.
When Srikantan got the cold shoulder on Sand Hill road, Yang got on the phone with Asia, bringing in Temasek, the VC arm of the government of Singapore. He also helped secure investments from Ericsson, which is building out data centres in Europe, and Newtech, a data center builder in Asia.
In other words, he got investments from the companies that were using Pluribus’s product and could help sell it to others.
And boom, Pluribus is now a serious player, particularly in the growth markets of Asia (especially China) a market where Cisco struggles.
“Our investors are now from the growth/equity large-scale financing world. The source of funding for us is very promising. It takes several rounds of raising a large amount of money to really capitalise the company and take it to the next level,” Srikantan told us. “We have a shot now, a path to be successful.”
“There was a belief among VCs that the category was over and there was no room for another player. And we proved them wrong,” he told us with a smile.