Midokura Raises $20 Million for Its SDN Offering

The new round of financing brings the company's total to $44 million and will be used to accelerate innovation of its MEM technology.

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Midokura raised another $20.4 million in financing for its network virtualization technologies as the company looks to grow in a highly competitive market.

The Series B funding, announced June 8, came from Japanese firm Simplex and current investors Innovation Network Corp. of Japan and Allen Miner, who also is on the company's board of directors. In all, Midokura has raised more than $44 million.

Company officials said the money will be used to expand and accelerate innovation and development of the vendor's Midokura Enterprise MidoNet (MEM) product, which is an overlay solution that sits atop the hardware infrastructure from other vendors that is used for private clouds running the OpenStack open-source software suite. Midokura also will expand its executive and development teams and bring in new partners.

Midokura's MEM technology creates an intelligent software-based network abstraction layer that sits between the hosts and physical network through decoupling the OpenStack infrastructure-as-a-service (IaaS) cloud from the network hardware. Midokura, which launched in 2010, offers its technology as an enterprise production solution or as an open-source version that is available for free to the OpenStack community. It's being used by companies in more than 120 countries, Midokura officials said.

The production version costs $1,899 per host and comes with support and services from the vendor as well as support for third-party technologies, including several from VMware.

"The network is the enabler of a connected lifestyle, including connected cars and connected devices," Tatsuya Kato, co-founder and chairman of Midokura, said in a statement. "With the wholesale re-imagination of global industries, from commerce to financial, travel and transportation, software gives rise to a new class of applications that demands higher levels of network agility and performance."

Midokura's customers include Blue Jeans Network, Overstock.com, Puppet and SysEleven. In addition, the company has several partners, including Dell—which offers MidoNet as one of the software options in its Open Networking initiative—and Fujitsu, which last year announced it was integrating the MEM technology into its OpenStack-based public and private cloud architecture, replacing the OpenStack Neutron plug-in component.

Miner, the investor and board member at Midokura, said the company is poised to take advantage of the expected growth of the global software-defined networking (SDN) space, which IDC analysts are predicting will be worth $12.5 billion by 2020.

"Midokura has a savvy executive team focused on staying on the forefront of this market," he said in a statement. "A game-changing vision, laser-like focus and A-team are the tenets of a great startup, and this is what I see in Midokura."