The number of networked devices is expected to reach 29.3B by 2023, with the growth rate currently hovering around 10%. Today, DriveNets, an enterprise startup that has built a more cost-effective way for service providers and other large connectivity users to scale to meet that demand by leveraging software and cloud innovations rather than relying solely on hardware, is announcing a large round of funding, a sign of the rising demand for its technology.
The Israeli startup, which offers software-based solutions to service providers, allowing them to run them as virtualized services over “white box” generic architecture, has raised $262M in equity funding to expand its technology, geographical footprint, and business development. D2 Investments led the round, which was joined by DriveNets‘ existing investors, including Bessemer Venture Partners, Pitango, D1 Capital, Atreides Management, and Harel Insurance Investments & Financial Services.
This latest round of funding will be used to develop future technology solutions, pursue new business opportunities, and expand the company’s global operations and support teams to meet rising customer demand.
Today, the company works with nearly 100 customers — large networking service providers like AT&T, which in turn provide services to millions of others — and has seen network traffic over its cloud-based architecture grow 1,000% in the last year.
“DriveNets’ approach of building networks like cloud allows telecom providers to take advantage of technological efficiencies available to cloud hyperscalers, such as cloud-native software design and optimal utilization of shared resources across multiple services,” said Ido Susan, DriveNets founder and CEO. “This latest round of investment demonstrates our investors and customers’ confidence in us and will enable us to expand the value and global operational support we offer them.”
“DriveNets has demonstrated its ability to move the networking industry forward and has gained the trust of tier-1 operators,” said Adam Fisher, Partner at Bessemer Venture Partners. “While other solution providers are facing challenging headwinds, DriveNets continues to innovate and execute on its vision to change the future of the networking market.”
“DriveNets has already made a big impact in the high-scale networking industry and its routing solutions are adopted by tier-1 operators for their quality and the innovation they enable,” said Aaron Mankovski, Managing Partner at Pitango. “This investment will allow DriveNets to expand its footprint in the market and develop additional offerings.”
DriveNets, based in Israel, was founded in 2015 by Susan and Hillel Kobrinsky and offers communications service providers (CSPs) and cloud providers a radical new way to build networks, increasing their profitability by changing their technological and economic models. DriveNets’ Network Cloud solution adapts the cloud architectural model to telco-grade networking.
Susan previously founded Intucell, which was acquired by Cisco in 2013 for $475M and has since been sold. Kobrinsky previously founded Interwise, a company that specialised in online conference calls and was acquired by AT&T for $121M.
DriveNets’ pitch is that as the demand for more network capacity grows, service providers typically have to purchase a large amount of equipment (and go through the costly and time-consuming process of issuing those tenders and negotiating deals).
The operating system has a wide range of functionality, including core, aggregation, peering, cable, data centre interconnection, edge computing, and cloud services, which means that customers come for the discounts but stay for the services.