Cumulus Series D Raises $43M to Fight Proprietary Network Stacks

Cumulus Networks closed a $43 million Series D funding round, bringing its total war chest to fight proprietary network stacks to $129 million.

Telstra Ventures, the investment arm of the Australian telecommunications company, led the round. Telstra is also a Cumulus customer. “It’s the largest ISP in Australia and their engagement with Cumulus as a customer was critical to their decision to work with us on this financing,” Cumulus CEO Josh Leslie said.

All existing investors participated, including Andreessen Horowitz, Battery Ventures, and Sequoia Capital.

Cumulus’ Linux operating system runs on more than 50 switching platforms from 10 different hardware vendors. The company also sells its own branded turnkey hardware/software system.

Last year it expanded its open networking product portfolio with a performance monitoring product, software that enables webscale networking for containers and microservices, and a virtual data center to build and test network designs.

“This is a company that’s ready to scale,” Leslie said. “We’re at 800 customers, a third of the Fortune 500, and we have multi-switch deployments. But our sales and marketing efforts have been extremely modest relative to companies of our size.”

Cumulus will use the latest investment to expand its sales force and marketing programs. It wants to focus on reaching new customers in Europe, the Middle East, Africa, and the Asia Pacific region. The company also plans to expand its footprint within Fortune 500 enterprises and service providers, Leslie said. Existing service provider customers include Verizon and Japan’s NTT.

While the company’s software saw good early traction with platform-as-a-service and software-as-a-service providers like BlueJeans and Medallia, “in the last couple years traditional telcos and traditional enterprises are wanting to build their infrastructure in that same way,” Leslie said.

These traditional telcos and enterprises want software-defined data centers that give them the benefits of open networking technology: webscale efficiencies, automation, commodity hardware, and lower costs.

They don’t want to be tied to proprietary network stacks, Leslie said. Of the company’s 800 customers, “probably two-thirds of those were previously buying Cisco and they stopped in order to start working with Cumulus.”

Telco Data Center Expansion

Specifically, Voyager with Cumulus Linux is a product that “we think will end up fitting with the telco market because of their number of distributed data centers,” Leslie said.

This product makes Cumulus’ Linux operating system available on Voyager, a Facebook-designed, packet-optical transponder platform. It is slated for production-use availability early this year through partner ADVA Optical Networking.

“We should be demoing our progress shortly,” Leslie said. “We’ve had tons of customer interest in the project, so we’re proceeding on schedule.”

And is there an initial public offering in Cumulus’ future?

“We’re focused on building a big, valuable business in a really large market that is overdue for change,” Leslie said. “We’re less focused on outcomes, whether it be an IPO or any other outcome for the company. If we reach a point where it makes sense to take the company public, we will do so. But it’s not an explicit objective for the company at this time.”