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SD-WAN Vendor Viptela Raises $75 Million in Funding

The money will be used to expand the company's presence worldwide and to grab market share in the fast-growing SD-WAN space, CEO Amir Khan says.

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Viptela has raised another $75 million in funding, the latest proof point of the expected rapid growth of the burgeoning software-defined WAN space.

Officials with Viptela, one of almost two-dozen vendors in the market, announced May 25 that the latest round of funding was led by Redline Capital, with help from new investor Northgate Capital and existing investor Sequoia Capital. In total, Viptela has raised almost $110 million. As part of the new investment, Tatiana Evtushenkova, director of Redline Capital, is now on Viptela's board of directors.

Viptela CEO Amir Khan said in a statement that the new money "will enable us to add the resources to expand into new geographies, extend our lead in this hyper-growth sector and capture a lion's share of the market."

The software-defined WAN (SD-WAN) market will grow fast over the next few years. IDC analysts say the space will grow from less than $225 million last year to more than $6 billion by 2020, while Gartner analysts are predicting that although about 1 percent of enterprises currently are using SD-WAN, that will increase to 30 percent by the end of 2019.

It's also an increasingly crowded field. Not only are traditional networking vendors like Cisco Systems pushing their way in, but companies like Riverbed Technology and Silver Peak Systems are moving over from other areas, such as WAN optimization. In addition, there are numerous pure-play vendors, including Viptela, Talari Networks, CloudGenix, Aryaka and Glue Networks.

The primary driver for the space is the cloud. Data between campus and the data center traditionally ran via such modes as Multiprotocol Label Switching (MPLS). However, with the cloud and the proliferation of mobile devices, applications are coming from a variety of sources, including the cloud, and direct connections are needed. Businesses are looking for ways to make the WAN more agile, scalable and affordable, and want to incorporate and unify multiple transport models—not only MPLS, but also broadband, DSL, 3G and 4G.

Viptela's technology enables enterprises to augment expensive connectivity modes with less expensive options and to add bandwidth on-demand, reducing WAN costs by as much as 50 percent, officials said. Viptela's technology has been deployed by more than 25 Fortune 500 companies, they said.