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Data Center Network Software Startup Cumulus Raises $43M

Says it will use the money to expand outside the US, bring more Fortune 500 companies into the fold

The data center network software Cumulus Networks announced today it's raised $43 million in Series D funding. The round was led by Telstra Ventures, the investment arm of Australia's largest telecommunications company, with all existing investors, including Andreessen Horowitz, Battery Ventures, and Sequoia Capital, contributing to the pot. The round brings the company's total funding to $129 million.

A large portion of the money raised by the Mountain View, California-based software defined networking startup appears to be headed overseas. The company says it will focus on reaching new customers in the EMEA and Asia Pacific regions with a planned expansion of its sales force. Stateside, the company will use the money to expand its footprint with Fortune 500 enterprises (it claims to already count a third of the Fortune 50 as customers) and to bring more products to market.

Cumulus evidently used a rather oldfashioned approach to bring lead investor Telstra to the investment table: it sold the company on the value of its products and services.

"Telstra Ventures is focused on investing in strategic, value-added businesses that show strong market fit and growth potential," Mark Sherman, managing director at Telstra Ventures, explained in a statement. "In this case we had the advantage of being a Cumulus Networks customer first, which gave us several months of first-hand experience working with their products, services and team. After that experience, we were eager to expand our partnership and invest in the company. Open networking is key to growing service provider capabilities and we are thrilled to have Cumulus join our portfolio of strategic, innovative companies."

Founded in 2010, Cumulus is credited with developing the first Linux operating system for data center network hardware. Over the last four years the company has partnered with Dell, Hewlett Packard Enterprise, and Mellanox to bring its operating system to their network switches. Last year the company expanded its product line to include the NetQ validation tool; Host Pack, a suite of tools to aid in the deployment and operation of networks for containers and microservices; and Cumulus in the Cloud, a virtual data center for building and testing network designs and operations.

The company also has deep connections with the open hardware movement. It has a long involvement with the Open Compute Project, the open data center community Facebook launched about seven years back, and about a year ago signed on as a supporter of LinkedIn's Open19 Project, which grew out of the social network's data center strategy.

Cumulus's customer base, which includes Verizon, NASA, Yandex, DreamHost, and the Las Vegas-based data center operator Switch, has been going through a growth spurt lately. In 2017, the company went from having around 450 customers to over 800. Much of that growth was outside the US -- the company tripled its Asia Pacific business, with a doubling in EMEA.

"There’s a striking variety in our customer base, which ranges from large financial and healthcare institutions, to breakout SaaS stars, to some of the world’s largest internet companies," said Josh Leslie, Culumus Networks' CEO. "But the common thread running through them is that they are challenging the status quo of networking in their organizations and reaping huge operational benefits as a result. We're honored to partner with Telstra in this journey. We are excited to use this investment to bring modern, scalable networks to even more organizations around the world, particularly to service providers who are beginning to move into the networking space."

2017 was also a year of industry accolades for Cumulus, which debuted in the Visionaries quadrant of the 2017 Gartner Magic Quadrant for Data Center Networking and was inducted into the Innovation Hall of Fame by JP Morgan Chase.

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