Palo Alto Networks announced today that it has entered into a definitive agreement to acquire CloudGenix for $420 million. CloudGenix is known for its leadership in the software-defined wide-area networking (SD-WAN) space.
We first met the co-founders of CloudGenix, Kumar Ramachandran, Venkataraman Anand, and Mani Ramasamy in early 2013. The CloudGenix team had built some of the most widely-used networking products in the industry. CloudGenix’s vision was to revolutionize branch offices through cloud-delivered WANs. With CloudGenix, enterprises would gain cloud-scale economics for the branch office with the freedom to use any WAN, any cloud, and best-of-breed infrastructure services.
Being people-first investors we were inspired by the team, their values, and big vision. We co-led their Series A round of financing in May 2013 and I joined their board of directors. Our partner Ursheet started at Mayfield later that year in September 2013 and joined me as a second partner on the investment as a board observer. Ursheet had worked with this founding team at Cisco and has been instrumental in helping CloudGenix by serving as a mentor to the co-founders. Mayfield has a model of providing entrepreneurs access to two partners along with our portfolio services team on every investment.
Kumar and his team had the conviction from Day One, that pioneering a new category of SD-WAN was the way to go. The CloudGenix SD-WAN changes the way networks are built by using an application-defined approach. The network can be managed to a set of application and business rules. This dramatically simplifies the management and operation of a WAN. CloudGenix SD-WAN solution connects branches securely with application awareness to seamlessly integrate cloud, take advantage of broadband Internet, align WAN management with business priority, and reduce remote office hardware and operational costs.
Category leadership is not for the faint of heart, especially for start-ups with limited resources. However, Kumar and his team addressed the challenge methodically, building a great product and gaining credibility with analysts and early customers. They hired a world-class team of sales leaders, with Matt Hickey at the helm. Matt and his team have done an incredible job at CloudGenix acquiring over 250 customers, many of which are in the Fortune 1000 and include companies in healthcare, retail, manufacturing, finance, banking, tech and hospitality.
2018 was a breakout year for the SD-WAN category and CloudGenix saw significant adoption in Fortune 1000 enterprises. Gartner predicts that by 2023 more than 90 percent of WAN edge infrastructure refresh initiatives will be based on virtualized customer premises equipment (vCPE) platforms or SD-WAN software/appliances. The company was recognized as a visionary in the Gartner Magic quadrant on WAN Edge infrastructure in 2019. On March 26, CloudGenix was named a Gartner 2020 Peer Insights Customers’ Choice for WAN Edge Infrastructure. SD-WAN is now entering the early majority phase and with its 300% revenue growth year on year, CloudGenix is in a great position to dominate the SD-WAN market.
As early-stage venture investors, we are passionate about company building and all that it entails. We are comfortable with making investments in companies at the ideation stage; the fact that the businesses we invest in will evolve; are prepared to work hard to help the founding team scale; and always keep our eye on the long term.
We also want to thank our co-investors Max Gazor @ CRV, Enrique Salem @ Bain Capital Ventures, Alex Weiss @ Clearsky, Josh Schertzer @ Blackstone, Andrew Fligel @ Intel Capital, and Venu Pemmaraju @ Wipro Ventures.
It has been an honor to partner with Kumar, Anand, Mani, Matt and the rest of the CloudGenix team on this journey. Please join me in congratulating them on building a great company and looking forward to their exciting new chapter ahead as they combine forces with the visionary leadership at Palo Alto Networks.
Originally posted on LinkedIn.