Telstra Anchors $45M Cumulus Round

Coinstacks

By: R. Scott Raynovich

Cumulus Networks on Tuesday announced a new $43 million funding round led by Telstra Ventures, the investment arm of Australia's largest telecommunications company. 

The round is impressive in both its size and the connection with Telstra, which represents a substantial anchor customer. It also reflects the interest that service providers have in using open Linux-based tools to build cloud-style networks to launch their next-generation services. 

Cumulus makes a Linux-based operating system (OS) that is optimized for building networking "white boxes" -- commodity hardware than can be linked with software-defined networking (SDN) software to scale cloud installations.

All of Cumulus' existing investors, including Andreessen Horowitz, Battery Ventures, and Sequoia Capital, participated in the round. A public statement said the company will use the funding to expand its salesforce and invest in marketing programs, with a focus on reaching customers in the EMEA and Asia-Pacific regions. 

The investment marks a significant roadmap for Cumulus, which was one of the startups that was was heavily hyped (including by yours truly) in the early phases of the software-defined networking (SDN) market, but then went through a rough patch. In 2016, Cumulus took a new direction under CEO Josh Leslie, who took over in March, 2016, when co-founder JR Rivers, the former CEO, moved over a chair to focus on the Chief Technology Officer (CTO) role. Leslie had been Cumulus's VP of Sales.

Since the management shift, Cumulus focused on the tools for managing the Cumulus OS and brought many new customers on board. Customers include Verizon, NASA, BlueJeans NTT, and Athena Health, among many others. Some sources say Cumulus has been successful in taking advantage of the cloud shift by focusing on the IT managers with cloud management roles and experience, rather than on network operations staff which are more accustomed to traditional networking hardware. In the past year, the company has also added management tools, such as NetQ, a network fabric and telemetry management product; Host Pack, for container management; and Cumulus in the Cloud, a tool for testing and designing cloud operations.