10 Months From Launch To Sale: Behind The Latest Ludicrously Fast Exit In Enterprise

Business Insider

Every few weeks, we hear about another fast exit in the insanely hot new software-defined networking market.

Today, 10-month old LineRate Systems was acquired by F5 Networks.

The companies didn't announce how much F5 paid, but we do know that Boulder, Colo.-based LineRate had a $4.75 million seed round led by Boulder Ventures.

And we know that it only launched its product in April—just 10 months ago.

We're guessing that the LineRate folks raked in a hefty payout because the valuations on these SDN startups have been super high.

The feeding frenzy started when VMware bought Nicira, a leader in the SDN market for $1.26 billion in July.  Nicira had raised about $50 million and had come out of stealth five months earlier.

Another SDN startup, Contrail Systems, was bought in December for $176 million,  just two days after it launched . It had raised $48 million.

The reason that SDN startups are getting gobbled up is because SDN is a new technology that turns enterprise networking on its ear. Instead of buying expensive routers and switches with a lot of fancy features from the likes of Cisco, companies can buy simpler, cheaper hardware—and less of it. This makes networks more flexible and less expensive than they are today.

The market is projected to grow from $360 million in 2013 to $3.7 billion by 2016.

LineRate was one of the SDN startups Business Insider told you to watch just last month.

We weren't kidding about keeping a close eye on them. The way these companies are getting snapped up, if you blink, you'll miss them.



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