The software-defined wide area networking (SD-WAN) vendor Aryaka is planning an IPO in 2018, reports Reuters. And the company’s CEO Shawn Farshchi said it’s aiming for a valuation of more than $1 billion.
The company reported recurring revenue in 2015 of about $24 million, and it projects recurring 2016 revenue of about $50 million. As far as reaching a $1 billion valuation, Shehzad Karkhanawala, Aryaka’s public relations manager, told SDxCentral today, “We’re en route to end 2017 with $102 million in annual recurring revenue. If you look at valuations in our industry, typically there’s a six to 10 times multiplying factor.”
In March 2015, Aryaka closed $16 million in funding. Karkhanawala said the company has raised total VC funding to date of $75 million.
The company, which was founded in 2009, is the first SD-WAN vendor to talk about an initial public offering.
Perhaps its owners have been taking to heart analyst reports such as a widely-cited one by IDC that predicts global SD-WAN revenues will exceed $6 billion in 2020 with a compound annual growth rate of more than 90 percent over the 2015-to-2020 forecast period.
Or, perhaps their imaginations have soared after Nutanix’s IPO on Sept. 30. The hyperconverged infrastructure company was initially priced at $16 per share. But the price doubled on its first day of trading, valuing the company at $2.2 billion. Its shares peaked at $46.78 on Oct. 3. And it closed trading today at about $33 per share.
Generally speaking though, the SD-WAN market is still in its infancy. Asked about the future for SD-WAN startups, Cliff Grossner, a senior research analyst with IHS Markit, said, “It would surprise me if SD-WAN was eventually big enough to go public.”
Aryaka says it’s different (and better) than all the other SD-WAN startups because, rather than just providing a software-defined networking (SDN) overlay on existing connections, it’s invested in a global private network. It put this network together by buying Layer 2 capacity from Tier 1 and Tier 2 service providers.