Cisco, Telstra back SD-WAN startup VeloCloud in $35m round
Cloud network startup VeloCloud has raised $35 million in a Series D round led by Hermes Growth Partners. Telstra Ventures and the Malaysian government's investment fund Khazanah Nasional Berhad also contributed to the round, as well as existing investors Cisco Investments, March Capital Partners, New Enterprise Associates, and Venrock.
The latest round brings the total amount raised by the Mountain View, California-based startup to $84 million.
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The funding will be used by VeloCloud to expand its business so that it can support larger carrier and enterprise customer deployments. It will also be used to accelerate new software-defined wide area networking (SD-WAN) product development, the startup said.
While the SD-WAN market has historically been led by networking vendors that specialised in hardware-based solutions such as Cisco, new carriers are emerging to add value to their basic connectivity offerings.
This is because SD-WAN can dynamically route traffic over a combination of private and public access types, customers can maintain control over this hybrid network from a centralised location rather than manage multiple routers, and there is no need for customers to replace their existing hardware.
Since the closure of its Series C round more than a year ago, VeloCloud has signed service provider deals with AT&T, Sprint, Mitel, TelePacific, and Windstream, on top of earlier agreements with Vonage, MetTel, EarthLink, and NetOne.
The startup claims to have exceeded 600 customers and 50,000 installations, with VeloCloud co-founder and CEO Sanjay Uppal saying its growth has exceeded even its "stretch goals".
Mark Sherman, managing director at Telstra Ventures, said the telco and VeloCloud are "completely aligned" in their vision to deliver "network agility" and "architectural flexibility" to enterprise customers, particularly in the Asia-Pacific region.
Telstra debuted its hybrid SD-WAN service in May last year with Cisco as its main go-to-market vendor. VeloCloud will also now get a front seat as one of Telstra's vendors as the Australian telco continues to expand its service.