A great exit in Elaia portfolio’s: F5 acquires Volterra, the platform for distributed cloud services
(aka the amazing story of Acorus Networks)
By Marc Rougier.
Today, F5, (NASDAQ: FFIV), the Seattle-headquartered specialist of app security and delivery announced the acquisition of Volterra, a Silicon Valley-based startup that helps deploy, connect, secure and operate apps across multi-cloud and the edge.
This is a $500m operation (including $60m of deferred consideration): a very solid — and fairly rapid — exit for a company from our portfolio at Elaia.
This blogpost tells the story, hopefully with some useful takeaways, of our journey as a VC, from our first meeting with the Entrepreneurs, to this impressive, final achievement.
📍2015, it all started out as a nightmare!
That night, Scoop.it, a martech startup I co-founded, was under a violent DDoS attack. Stéphane Gault, our brilliant DevSecOps and last defender on the front, called friends to the rescue: Raphaël Maunier and Benjamin Schilz, two web networking and cloud security experts with a worldwide reputation as “miracle makers”. As repeat entrepreneurs, Raph and Ben were about to launch their new ventures, Acorus Networks, an anti-DDoS as-a-Service startup. The good thing about being a cybersecurity startup is that, when your prospect is under a nasty attack, it will probably not spend months arguing about your value proposition. Successful startups must address proven pain points; well, DDoS attacks are a pain. That night, Scoop.it would end up being Acorus Networks’ launch customer: they held the fort, defeated the cyber-vilain and kept the business up and running — thank you Steph, Ben, Raph and Acorus Networks.
📍Fast forward to 2018: From a great product to a Series A
Acorus Networks had developed a robust offer and captured a nice collection of customers, from the media, e-commerce and telco industries: product market fit was established, customer satisfaction was high, market conditions were favorable and the company was still very lean. It was a good time to scale and therefore to consider a capital increase. After my time at Scoop.it I turned VC at Elaia; we focus on early stage, tech-intensive, B2B ventures with global ambition. While we are a priori vertical-agnostic, we love technology and have special interests in high potential sectors such as Fintech, RetailTech, Digital Life Science, Digital Transformation and, of course, Cloud Infrastructure and Cybersecurity. I therefore was happy, honored and utterly interested when our path crossed again with Raph and Ben. We led Acorus Networks’ Series A — and had the pleasure of working again with Reza from Partech. Back in 2018, we had already written a blogpost about Acorus Networks: 13 reasons why we invested.
📍2019: Becoming a leader in its market and joining forces
Rapidly, Acorus Networks established its leadership in Anti-DDoS software and its expertise in deploying high performance POPs (Points of Presence) with extreme efficiency. By then, they had doubled in size and tripled in revenues: their next challenge was to meet their international ambition. At the same time, on the other side of the pond, another awesome startup was moving fast forward: Volterra was developing a full stack platform with the mission to help Enterprises and Service Providers leverage edge and multicloud computing at scale. Volterra’s co-founder and CEO, Ankur Singla, is a serial entrepreneur with a stellar track record in developing networking/cloud businesses at light speed (at Aruba, then Contrail, then Juniper Networks). Volterra approached Acorus Networks to contemplate a possible merge, as both Acorus’ assets (their anti-DDoS software and their POPs deployment skills) could be beneficial to Volterra’s plan. Ankur, Raph and Ben had known each other’s reputation for quite some time and joining forces seemed obvious as an opportunity to quantum leap to the champions league, with immediate global visibility and ambition. The operation was executed concomitantly with a fundraise and Elaia became shareholder of the resulting entity Volterra, alongside tier-1 Silicon Valley VCs such as Khosla Ventures and Mayfield, as well as international corporate investors such as Microsoft, Samsung and Itochu. Raph and Ben took the leadership of the infrastructure within Volterra.
📍2021: F5 acquires Volterra for $500M
Volterra — Acorus Networks inside — was gaining impressive momentum in the edge / multi cloud space, receiving accolades from Gartner and IDC, beating their Business Plan despite the COVID-19 crisis and capturing major clients on international markets. They became a strategic target for F5 and their grand vision for the First Edge 2.0 Platform for Enterprises and Service Providers. The deal was announced last night. This is another great and rapid exit for Elaia, less than three years after Raph and Ben pitched their Series A deck in our offices.
📍Key Takeaways from a VC standpoint
👉 It is all about the team
We knew it before. But again, this is all about the team: vision, talent, hard work, execution. We have a boundless respect for Raph, Ben and Ankur. They have over-delivered day after day, never compromising on the grand vision, while adapting with agility and pragmatism to the sometimes harsh and moving conditions. And worth mentioning, they always kept their mind open to discussion, although, quite obviously, they are the experts.
👉 There is value in tech-intensive, B2B ventures.
Tech-intensive startups create tangible assets, deliver non-trivial values to their customers and the expertise they require establishes strong competitive edges. B2B models enable to materialize and extract this value. Finding and assessing disruptive technologies early is not easy — it calls for specific expertise; but when product market fit is proven, the path to value exists. Market conditions and of course execution will determine the scale of such value, but its very existence is not speculative.
👉 Cybersecurity and Cloud infrastructure is still a fascinating space for VCs.
We discussed this at length in a previous tribune Cash in Cloud. This certainly holds true. As the digitalization of the world continues fast forward, the need for more advanced technologies to improve / facilitate networking, storage, security, performance and manageability will keep increasing. As the market size is humongous ($1Tr per year), fund raising, M&A and IPO activities are poised to be fierce in the years to come — a context we, VCs, very much love.
Acorus Networks team, Volterra team, what a journey! It’s been an honor to work with you. As an entrepreneur, I found it a bit too short — because I liked it! As a VC, I found your vision brilliant and your sense of timing totally exquisite. Congratulations, respect and thank you.
And special thanks to whoever attacked Scoop.it in 2015.
