Israel-based DriveNets announced on Wednesday that it has snagged $208 million in a Series B funding round to bring its valuation to over $1 billion.The latest funding round is further proof that DriveNets' approach for disaggregating network architectures is finding increased traction with service providers and cloud providers.
In its press release, DriveNets said it would use the latest investment round "to continue to offer service providers and hyperscalers a radical new way to build their networks with higher capacity and scale at a much lower cost."
The latest investment round was led by new investor D1 Capital Partners with additional investments from existing investors Bessemer Venture Partners and Pitango. New investor Atreides Management also took part in the Series B round.
"With over $300 million raised and their unicorn valuation, the investment community is betting that DriveNets' disaggregated approach to networking will gain widespread adoption with both carriers and cloud providers," said Roy Chua, analyst and founder of AvidThink. "Our conversations with major players in both markets indicate that disaggregated architectures like DriveNets are appealing and aligns with service provider goals to go cloud-native. The agility facilitated by a single horizontally-scalable architecture that can serve the continuum from an edge site to core backbone routers while reducing both capex and opex means it's a matter of time before increased adoption.
"Nevertheless, switching out core functionality in carriers takes time and this funding round will help DriveNets sustain its growth and create more momentum into the market."
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Service providers are looking for ways to reduce their costs and break up legacy silos. Cloud-based software orchestration and automation are key components for disaggregation. Cloud-based routing infrastructure also enables service providers to cost-effectively grow and scale their networks on demand.
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After working with AT&T for over four years, DriveNets was finally able to announce that it was providing the core-networking routing software for AT&T's next-gen core network last year. In an interview with FierceTelecom last week, DriveNets' Run Almog, head of product strategy, said he expected more deployments would become public this year.
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DriveNets' Network Cloud uses cloud-native routing software to support new functions in the underlying white-box hardware. DriveNets, which emerged from stealth mode in February of 2019 with $110 million in Series A funding, has said the vision behind Network Cloud was to simplify and scale service providers' rollout of 400G, 5G and other new services.
By taking cloud features to the network, instead of vice versa, Network Cloud can run the routing data plane on white-boxes and the control plane on standard servers, which separates the network cost from capacity growth. DriveNets' competitors include Arrcus, IP Infusion and Volta Networks on the white box, disaggregated front.
DriveNets was founded in 2015 by CEO Ido Susan and Hillel Kobrinsky. Kobrinsky, who had a career stop at AT&T, serves as the company's chief strategy officer. Ido has previously said DriveNets was in various stages of discussion with about 20 Tier 1 service providers around the world to deploy Network Cloud.