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Friday, May 26, 2023

DriveNets Israeli Startup for Networking Software Raises $208M Valued At $1B

Drivenets Ltd., an Israeli networking software business, revealed that it has successfully raised $208 million in a Series B fundraising round, valued at $1.3 billion. The additional funding raises the organization’s overall funding to $325 million. Almost $14 million was invested in the round, which was led by new investor D1 Capital Partners with substantial follow-on investments from current investors Pitango, Bessemer Venture Partners, and Harel Insurance. Atreides Management, a new investor, also took part in the round.

Before D1 was chosen, Calcalist found out that there was a lot of interest in the round, with some of the offers surpassing $400 million. Susan and Hillel Kobrinsky launched this telebusiness in 2016. Susan had founded Intucell before DriveNets, which Cisco purchased in 2013 for $475 million and later sold on. Interwise, a company Kobrinsky previously founded that specialized in internet conference calls was sold to AT&T for $121 million. DriveNets came out of hiding in 2019 and now collaborates with service providers and cloud infrastructure services all around the world. With the help of private investors like C4 Ventures, Bessemer Venture Partners, and Pitango Growth, the company raised $117 million two years ago.

Telecommunications firms purchase enormous and pricey routing systems as a strategy to handle an exponential amount of data and run existing services. This means that a telecom corporation will need to raise money from other sources if they want to stay up with demand. DriveNets’ approach avoids this problem by routing the network through the cloud, which lessens reliance on third-party hardware. A software and cloud solution DriveNets allows telecom firms to manage network traffic without having to invest in costly and complicated hardware.

The majority of DriveNets’ 36 customers are Tier 1 service providers, along with a small number of cloud and content providers. According to CEO Ido Susan, The business is operating “more than 20 proofs of concept” in several locations all over the world. DriveNets already employs more than 400 people, and Susan said the company will continue to grow as necessary to fulfill the market need for sales and support.

By providing cloud-native software that can be put in the network like building blocks and managed as a single, shared resource, the company is in direct competition with the traditional router and switch suppliers. DriveNets envisions itself as accomplishing carrier routing and switching what VMware did for data center computing and storage in terms of altering the regulations governing their management, use, and acquisition while also unseating certain industry heavyweights in the process.

DriveNets has created an IP networking software stack that, when installed on high-end white box hardware constructed utilizing Broadcom Jericho2 processors, provides the throughput and scale required for fundamental networking routing tasks in hyper-scale networks and telecom. Additionally, DriveNets have been implemented in AT&T’s IP core network as part of its effort to run and extend its network more efficiently and flexibly while also avoiding vendor lock-in.

DriveNets Network Cloud’s ability to completely virtualize network and computing resources makes it possible for communication service providers to scale their operations considerably more successfully than they could with monolithic routers.
DriveNets appear to be here to stay, which should give hope to the companies in the world of disaggregated networking where major operators Orange and Vodafone investing plans are in demand.

It used to be very difficult to break into the market and build a sustainable business when physical box production and hardware development were required to compete with the likes of Juniper, Cisco, Huawei, Nokia, and others. For instance, many companies tried to build a competitive carrier-grade router for the telco market over the past 25 years only to fail miserably.

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