Cisco started an early-stage venture capital fund called Decibel with Jon Sakoda, a former partner at venture firm New Enterprise Associates (NEA).
Although Cisco and Sakoda just announced the new VC fund today, Decibel has already invested in two startups: Blameless, a site reliability engineering (SRE) company that launched last week with $20 million in funding and marquis customers including Home Depot and DigitalOcean. And in February, it participated in security company Cmd’s $15 million Series B round. Cisco won’t say how much Decibel invested in either startup.
Sakoda spent 12 years at NEA where his investments included Uber, Snapchat, and BlueJeans Network. Previously he founded instant messaging startup IMLogic, which Symantec acquired in 2006.
Cisco already has a venture arm, Cisco Investments, that invests $200 million to $300 million annually. But while that firm invests in companies at various stages of development, from Series A rounds to late-stage growth, Decibel will focus exclusively on very early stage startups.
“Early stage companies require a lot of mentorship to help teams find a product and market fit, win their first few customers, and hire their first management team,” said Rob Salvagno, vice president of corporate development at Cisco Investments, in an email. “Increasingly, we’ve heard that founders turn to the wisdom of more than just their VC partners, but also other successful founders and startup executives to help them navigate through the natural volatility of their earliest years. We felt the combination of an entrepreneurial and independent VC firm, started by successful founders and operators, working in combination with our entrepreneurial ecosystem at Cisco would allow us to build the best partnerships with early stage founders.”
In a blog post about Decibel, Salvagno cited Cisco’s 200-plus acquisitions over its 30-year history. More recent purchases include AppDynamics and Duo Security, which Salvagno called “market defining acquisitions for Cisco.” The company bought AppDynamics for $3.7 billion in 2017, and Duo Security for $2.35 billion last year. Both companies’ founders are now founding advisors at Decibel.
But, Salvagno added, both companies “were nearly 10 years old before becoming a part of Cisco. How could we put Cisco in a position to play a foundational role in starting the next AppD or Duo?”
The answer, Cisco says, is the new VC company. Decibel is structured as an independent firm and Cisco won’t say how much it plans to raise. However, Sakoda filed a Form D with the U.S. Securities and Exchange Commission (SEC) that puts the fund at $500 million.
Photo: Courtesy of Decibel. Rob Salvagno, head of corporate development and Cisco Investments (left), and Jon Sakoda, founding partner of Decibel.