Late-stage investor TCV, which has been involved with many other startups who have hit it big, have made a $90 million investment in Silver Peak, to help the company and its channel drive forward at a time when the SD-WAN market is taking off.
David Hughes, Silver Peak’s Founder and CEO
SD-WAN and hybrid WAN provider Silver Peak has announced a $90 million strategic investment from TCV. The company sees this investment as a critical validation of its technology and strategy in the SD-WAN space. They also see the funds as critical for expanding their sales force to work with channel partners, as well as their support facilities and their R&D. TCV general partner Tim McAdam will join the Silver Peak board of directors.
Silver Peak started out in 2004 as a WAN optimization vendor, before making the decision to pivot to the nascent SD-WAN market three years ago.
“We now have over 800 deployed and paying enterprise customers,” said David Hughes, Silver Peak’s Founder and CEO.
Hughes said that the additional funding was needed to provide Silver Peak with the resources to stay near the top of the market at a time when the market is rapidly expanding, particularly at the edge.
“SD-WAN is moving out of the early adopter stage and is going mainstream,” he stated. “We believe that within two to three years, pretty much all enterprises will have deployed it. There are many companies in this space. Fifty-something have SD-WAN as a label for something, but as the market expands, we also see it consolidating around a handful of players, and we are there in the top three. We have spent the last three years working with enterprises, turning their WAN from a headache to efficient with SD-WAN. Now we see the market moving to a more advanced state, what we call self-driving WAN, where the network is highly automated, to be able to run itself and compensate when links get cut. We aren’t the only ones focused on applying AI and automation in SD-WAN, but we believe that we are unique in terms of how far down the path we are. All these things are fundamentally about automation and AI. We are pushing very fast and with this money, will be able to push even faster.”
Hughes said that TCV’s validation also sends an important message to the market.
“TCV is a late stage investor, and their other investments have included Airbnb, Netflix, Spotify and Splunk,” he indicated. “This is a big external vote of confidence in the SD-WAN market, as well as of a validation of us within it. Our aspiration is being the leading independent in this space. As SD-WAN moves from early adopter to mainstream, that means expanding across the board, expanding our sales force and the people we have working with the channel. We are all investing both in expanding our support and our R&D.”
“After researching all the players in the multi-billion-dollar SD-WAN market and speaking with enterprise CIOs, it is clear that Silver Peak has the most complete solution, clear market differentiation and traction, and a unique vision for the future of the new WAN edge,” said Tim McAdam, general partner at TCV. “We look forward to working with the team to rapidly grow the business.”
Hughes said that he doesn’t see Silver Peak at a disadvantage in a market where much larger companies like Cisco, VMware and HPE all have offerings.
“Others do have more money, but these big companies also do a lot more things, and their SD-WAN elements are compromised by being part of bigger organizations that have other priorities and other markets,” he stated. “Cisco is still committed to routers, but many customers today think that all they need is an SD-WAN at the edge. So while we compete with companies that are bigger than us, the part of those companies that we compete with is a small part of those companies.”
Hughes said that future innovative product launches are coming, not far down the line.
“We have a steady cadence of things we will be talking about for the rest of the year,” he said. “There’s a ton of room for innovation.”
Hughes said that while new resources will be directed at Silver Peak’s channel, they will be allotting them strategically rather than recruiting heavily for new partners.
“New partners are always part of the picture, but we really want to invest in the channels where there is a joint vision, where the partner wants to invest with us and see joint success,” he said. “Partners are always looking for the next big thing, but learning about a product has a high cost, and if it’s only deployed in a small fraction of their opportunities, it’s not great for them. We have 200 plus partners today – but what really matters is that top 20 per cent, that we work with closely.”
