American technology giant CISCO has announced the acquisition of Viptela, a networking startup owned by an Indian-origin software industry veteran, for $612 Million in an all-cash deal. The acquisition is expected to close in the second half of 2017 after the completion of the customary closing conditions and regulatory review.
Viptela is a privately held software-defined wide area network (SD-WAN) company based in San Jose. The startup was founded February 2012, by Former CISCO employees Khalid Raza and Amir Khan. Viptela provides technology for virtualization of the Wide Area Network (WAN), which allows global companies to build carrier agnostic, policy-controlled and cost-effective WANs.
According to a database track Pitchbook, Viptela was valued at $900 million by its investors. The startup had raised over $108 million in venture funding from VCs like Sequoia, and it achieved that valuation when it raised $75 million in May 2016, led by European and Russian VC Redline Capital Management.
Viptela CEO Praveen Akkiraju, University of Madras and Harvard Business School alumnus, said: “The company’s fabric, as it relates to SD-WAN and cloud networking, fits in as an important piece of Cisco’s Enterprise Networking strategy which is driving an industry-wide transition to a software-centric architecture and business model.”
Post acquisition, the 120-member team of Viptela will join CISCO’s Enterprise Routing team within the Networking and Security Business led by Senior Vice President David Goeckeler for further operations. It is still unclear if both founders will be going to Cisco as well.
This is the second acquisition made by CISCO this year, Earlier, in January CISCO also acquried an application intelligence venture- AppDynamics.
On the acquisition, Scott Harrell, senior vice president of product management for the Cisco Enterprise Networking Group, said: “Viptela’s technology is cloud-first, with a focus on simplicity and ease of deployment while simultaneously providing a rich set of capabilities and scale. These principles are what today’s customers demand .”
This acquisition gives CISCO a vendor that sells much of its technology through AWS, which could help it gain more customers that use cloud services instead of buying data center hardware. Read more about Indian Startup Ecosystem.