Arrcus taps former VMware exec as its new CEO, banks another $28M

Shekar Ayyar
Ayyar told Fierce Arrcus is turning its attention to the edge and will use its latest batch of cash to boost its go-to-market strategy. (Arrcus)

Networking startup Arrcus reeled in a big fish, appointing the former EVP and GM of VMware’s telco and edge cloud business Shekar Ayyar as its new CEO and board chairman. The company also raised an additional $28 million in backing from new high-profile investors, including SoftBank and Liberty Global.

Arrcus has been working to make a name for itself in the routing and multi-cloud networking markets in recent years, fueled by a total of roughly $49 million in support from two initial fundraising rounds. Now, Ayyar told Fierce, Arrcus is homing in on the edge and will use its latest batch of cash to boost its go-to-market strategy.

The new CEO explained its strategy will center on promotion of the Arrcus Connected Edge (ACE) platform, which effectively repackages its existing technology in a three-layer stack. The company’s ArcOS will provide foundational networking capabilities, with its ArcEdge platform sitting on top to provide multi-domain connectivity across different carrier and cloud environments. Its ArcOrchestrator and ArcIQ will be the icing on the cake, ensuring everything is accessible through APIs and enabling analytics and automation.

“What we are doing now which is different is a very focused and premediated approach looking at the edge as a set of use cases that are going to require network refreshes or extensions of the architecture as well as policy deployment and application creation that’ll bring us into customer instances that require Arrcus as software,” Ayyar said.

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So, rather than multi-cloud networking being the company’s “reason for existence, it becomes more a feature of what we do so that anything customers are deploying has that multi-cloud capability.” Likewise, distributed routing “becomes more of a use case of deployment of Arrcus.”

Ayyar said in terms of business model, its ACE platform can be deployed either on hardware or using a consumption-based software-as-a-service framework.

Eye on the edge

Prior to taking his new role, Ayyar spent more than 14 years at VMware, where he ran strategy and corporate development, including merger and acquisition activity, for the company’s Telco Group for around 10 years. During the remaining four years Ayyar “incubated and ran” VMware’s business unit focused on equipping operators to run their 3G, 4G and 5G core and radio access networks using VMware software.

“Even before I came to Arrcus I have been a big believer and a proponent of the edge and of the distributed nature of what is going to be the state of compute and networking as we go ahead,” Ayyar said. “The business problem we see companies in different vertical industries are grappling with right now is about being able to create and deploy applications at scale in a distributed environment.”

Upon researching Arrcus after leaving VMware, “I found that the platform Arrcus has built in terms of the operating system for networking and then being able to then deliver routing and switching functionality on top of it is ideally suited for extending enterprises, telecom carriers as well as cloud carriers into the edge. It’s kind of the perfect networking extension, substrate, et cetera that allows them to go into this distributed architecture mode.”

While Ayyar is still developing long-term plans for the company, he said a year from now he fully expects Arrcus will have “five to 10 new marquee names of customers,” including Tier-1 operators and Fortune 100 companies, to share with the world. “That’s the cadence I’d like to be on,” he added.

Funding

Alongside its CEO announcement, Arrcus revealed Liberty Global, SoftBank and SamsungNext joined its list of investors as part of a $28 million Series C funding round. The figure increases Arrcus’ total raised to roughly $77 million. Previous investors include Clear Ventures, General Catalyst Partners and Lightspeed Venture Partners.

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Ayyar said the basis for SoftBank, Liberty Global and Samsung’s investments “is around the core of their business and how we can help engage, accelerate what each of these companies is doing.”

He added the additional money will allow it to ramp its go-to-market strategy and get “into customer conversations faster.”