(Reuters) - Cloud-based private network provider Aryaka, which plans to go public in 2018 with a more than $1 billion valuation, raised $45 million in its latest funding round, a source close to the matter said.
The funding was led by venture capital firm Third Point Ventures and included Germany’s Deutsche Telekom Capital Partners as a new investor, the source said.
Deutsche Telekom Capital, which is Deutsche Telekom AG’s (DTEGn.DE) investment management group, is the first telecom company to invest in Aryaka.
Milpitas, California-based Aryaka, which has about 500 customers across the globe including Skullcandy Inc and fashion house Gucci, helps businesses interconnect branches through its private network.
With more businesses moving to cloud, demand for such services has been surging.
Enterprises are ditching traditional public networking services provided by telecom companies and adopting private cloud-based networking systems from firms such as Aryaka.
The service provided by Aryaka, which is a software-defined wide-area network (SD-WAN), is faster and more stable compared to traditional public networking systems offered by telecom companies.
Research firm Gartner has estimated that about 30 percent of businesses will deploy software-defined networking in their branches by the end of 2019. (gtnr.it/1mZJxM2)
According to IDC, the market for software-defined networking is estimated to generate more than $6 billion in revenue by 2020. (bit.ly/2jSs5LR)
Aryaka, which was founded in 2009, gets more than 70 percent of its bookings through partners.
The company said in October it was in talks with telecom companies to form partnerships.
Aryaka, which aims to double its global customer base by the end of 2017, plans to invest the capital in R&D and sales to expand its global footprint, the source added.
The company, worth between $400 million and $500 million, raised $16 million in March.
Reporting by Rishika Sadam in Bengaluru; Editing by Martina D'Couto