CEO Center Stage: Rajan Raghavan, CEO and Co-Founder of The Fabric
How is The Fabric different than other investing and accelerating models?
When Prabakar Sundarrajan and I left Juniper after the acquisition of Ankeena, we wanted to continue our entrepreneurial journey. The rapid adoption of cloud, mobility, and IoT technology provided an opportunity to disrupt the infrastructure industry. The idea of providing an ecosystem for entrepreneurs and investors to come together and create new companies was appealing to us, but we didn’t want to simply provide funding, office space, and access; we wanted to actively collaborate with entrepreneurs and co-create The Fabric’s startups.
The Fabric’s co-creation approach involves being a part of the startup journey from concept to the company’s Series A funding round.
After that, we continue to work closely with co-founders through the growth stage, and provide operational and strategic advice on a weekly basis. In the formative phase, we are co-creators with the entrepreneurs, and because we are all co-founders of the company, the founding team’s success is our success.
While money and executives are everywhere in Silicon Valley today, what makes us different from other accelerating models is our multi-stage process. We use our deep domain expertise and 20+ years in infrastructure to identify the “white space” of opportunity in the market. The Fabric has its own experts in product marketing, market development and engineering who work side-by-side with our co-created companies to get their respective products into production with a few early customers.
Can you tell us about companies that you have funded that have gone on to do great things?
Our first co-created company was VeloCloud. My co-founder, Prabakar, and I realized that people wanted to have branch services over reliable broadband. This was a $7 billion market that could be disrupted, and we came up with an idea of having enterprise WAN services from the cloud, with the entire router in the cloud. By that time, boxes had become obsolete.
After the idea was crystallized, we were fortunate to meet two talented entrepreneurs, Steve Woo and Sanjay Uppal, who shared our vision and became co-founders of VeloCloud. Five years later, VeloCloud became a leader in the SD-WAN space, and was subsequently acquired by VMware.
We apply the same co-creation approach to other companies. The Fabric has launched nine companies, of which three have already been acquired: Appcito by A10 Networks, Perspica by Cisco, and VeloCloud by VMware.
What are the types of companies you are looking to back?
We look to co-create companies in the cloud, mobile, security and industrial IoT spaces.
In keeping with our thesis, we are seeking to disrupt the infrastructure space using cloud-delivered SaaS.
Every company we’ve co-created delivers value via a control or management service from the cloud and a data/packet processing component co-located with the application or on-premise at the enterprise. Perspica and IoTium are good examples of this.
Some of the areas we are looking to explore are cloud app performance assurance, multi-cloud data mesh, microservices security, connected device mobility and blockchain infrastructure. Many of these areas have a very strong alignment with Verizon’s 5G innovation initiative, and we are looking forward to closely collaborating with Verizon on such projects.
Do you see any big trends that are starting to emerge in cloud computing?
We predicted multiple trends would disrupt the infrastructure space. Our Fabric 1 fund was solely focused on cloud infrastructure and our Fabric 2 fund focused on multi-cloud and IoT. With Fabric 3, we are adding a focus area on mobile/edge cloud infrastructure.
What we are seeing is that applications in the cloud are getting distributed and enterprises are adopting multiple clouds to both avoid cloud lock-in and exploit specific capabilities available in each cloud. For instance, Google Cloud is good for AI-driven apps whereas AWS may host cloud native apps, with Azure being the platform of choice for Windows-based hybrid cloud apps.
We are also seeing that AI and deep learning in various degrees are a given for those exploring intelligent automation for these services. Every one of our companies has both SaaS and AI components to their services.
How is The Fabric hoping to capitalize on the disruptions 5G deployment is likely to create?
With 5G, we expect a lot of computing workloads being pushed to the edge. Spatial dynamics of 5G users, especially connected cars and drones, will lead to the emergence of the mobile cloud. Data from various sensors and sources will hit these processing nodes, and a different infrastructure will be required to collate and process this information. We plan to work with Verizon to co-create companies in these ‘white spaces.’
How do you work with corporate venture teams and strategic partners?
We align our product ideas with the requirements and goals of our partners. As our co-created companies grow and seek additional capital, we work with strategic partners to see if they would be interested in direct investments into these companies. We collaborate with our co-created companies and partners for a range of possible strategic outcomes.
