Software-defined networking in a wide area network, or SD-WAN, is a paradigm that decouples equipment from its control mechanism, in theory simplifying network and data center management. Its ease of use and modularity is one reason why research firm Gartner predicts that by 2020, over 30% of companies will use SD-WAN technologies in their branches, and why analysts at IDC anticipate the market will reach $4.5 billion in 2022.
One startup very successfully riding the adoption wave is Aryaka, a software-defined network connectivity provider founded in 2009 by Speedera founder Ajit Gupta, former Cisco executive Ashwath Nagaraj, and Rajeev Bharadhwaj, now a VP at Salesforce. The trio crafted a suite of network-as-a-service offerings enabling faster and more reliable connectivity than what’s available through public networks, and evidently, there’s demand for that. In the past year, Aryaka says that annual recurring revenue grew “significantly” and that it’s now managing thousands of additional sites.
That has investors lining up. Aryaka today announced that it’s raised $50 million in a series F funding round led by Goldman Sachs Private Capital Investing, with participation from Trinity Ventures, Mohr Davidow Ventures, Nexus Venture Partners, InterWest Partners, Presidio Ventures, Third Point Ventures, and DTCP. The capital infusion brings the San Mateo startup’s total raised to $184 million, following a $45 million series D in January 2017 and a $25 million series C in July 2012, and CEO Matt Carter says it’ll be used to scale business operations, grow revenues, and hire on employees.
“We are pleased to receive this investment from Goldman Sachs. This new investment allows us to further accelerate our business momentum and endorses our growth strategy,” said Carter. “We are extremely well positioned to help our customers drive WAN transformation and their multi-cloud and application performance initiatives, all while being delivered ‘as-a-service.'”
Aryaka’s managed SD-WAN — which is built on the back of distributed global points-of-presence (POPs) and Network Operations Centers (NOCs) — comprises orchestration, connectivity, optimization, and edge device tools. That’s in addition to public cloud services through partners like Amazon Web Services, Microsoft Azure, Google, Oracle, and others, and security solutions through Palo Alto Networks, Symantec, Zscaler, and more.
Aryaka says that most customers using legacy technologies like Multiprotocol Label Switching (MPLS) can switch to its SD-WAN products within days and add users and sites within hours. Moreover, the company claims that its technologies accelerate the performance not just of on-premises and software-as-a-service (SaaS) platforms, but cloud-hosted and remotely installed software, too, delivering up to a 40 times speed boost (with response times as low as 0.306 seconds) and up to 70% cost savings compared with multivendor solutions.
Aryaka goes head-to-head with Viptela, Silver Peak, and others in the SD-WAN sector, the former of which raised $75 million at a valuation of $875 million in 2016. But despite the formidable competition, Aryaka has managed to grow its client roster — which includes heavy hitters such as Cigna, Fitbit, Tableau, Tivo, Volex, Makino, Aruba Networks, Callaway, Rieke, Standard Life, Markino, JAS Worldwide, HMSHost International, Pilot Freight, and Allegis — to nearly 800 enterprises in 10 years.
“We’re constantly evaluating the market for high-growth companies that are leaders in their space. Our research shows that Aryaka offers a compelling solution for the SD-WAN market that continues to grow exponentially including increased adoption of SD-WAN managed services,” said vice president of Goldman Sachs Private Capital Investing Matthew Dorr, who plans to join Aryaka’s board of directors along with board observer and fellow Goldman Sachs Private Capital Investing VP Michael Kondoleon. “We decided to invest in Aryaka because of their highly differentiated offering, strong customer base, global footprint and their experienced management team.”