Network virtualization provider Midokura has raised a $20 million B round, following up on the $17.3 million it raised in 2013.

The round included new investor Simplex and prior investor Innovation Network Corporation of Japan (INCJ).

"Depending on the speed of OEM relationships, we have a chance at cash-flow break-even," says Allen Miner, a Midokura board member and a personal investor in the company. (Miner contributed to Series B and had also invested previously.)

Among the reasons he's optimistic about the company: Midokura has a growing base of paying customers — not just for services, but also for Midokura Enterprise MidoNet. (The company also licenses MidoNet on an open source basis.) And customers are applying MidoNet to bigger networks, those measuring thousands of nodes rather than hundreds.

Midokura has also attracted Dell as a reseller and is starting to be considered for a wider range of use cases. One partner is considering promoting MidoNet as a bridge between Amazon Web Services (AWS) and private clouds, Miner says.

Midokura's headquarters are in San Francisco, but the company originated in Japan, and its venture investors to date, including Simplex, have been from that country. That could be an advantage if the company needs to raise another round; Miner believes Silicon Valley could be an option, even though the venture capital market is tightening up.

"The company is somewhat known in the U.S., but one of the reasons funding gets hard for companies that are five or six years old is that there's a core of investors that get burned out on them," Miner says. "With Midokura, because 100 percent of the funding has come from Japanese sources, it's fresh in Silicon Valley."

Miner's own stake in Midokura goes beyond money. A former Oracle executive, Miner takes credit for bringing that company into Japan in the late '90s. He started SunBridge Partners as a way to invest in Japanese companies to, "show that savvy investing in Japanese companies could produce returns for LPs [limited partners] that were among the best in the world, including Silicon Valley."

Japanese startups have a tendency to go public shortly after they've become profitable, and that quick IPO grab makes further development difficult, Miner says. "On a small profit base, it's hard to go international." His hope is that Midokura can take a different route.

Photo: Lee Haywood on Flickr. CC2.0 license. Photo has been cropped.