(Bloomberg) The latest unicorn startup is Aviatrix Systems Inc., a cloud networking provider that helps companies ensure their data systems work well in cloud technology environments from Amazon.com Inc., Microsoft Corp. and Alphabet Inc. Aviatrix is now valued at $2 billion.
The company has raised $200 million, which highlights investors’ enthusiasm for technology that smooths big companies’ transition to the cloud.
TCV, a technology investment firm, led the financing, with participation from other new backers including Insight Partners and Tiger Global. It comes just seven months after a round that valued the company at $700 million.
The steep rise in valuation underscores how eager businesses are to move digital information out of their own servers and into the cloud’s distributed data centers. Many companies work with several cloud providers, multiplying both the complexity of the work and the opportunities for services that help them manage the change.
A good time to be a cloud startup—like Snowflake and Databricks
It’s a good time to be a cloud startup. Snowflake Inc., a data warehouse company, went public about a year ago at a valuation of $33 billion, just months after a funding round valuing it at $12.4 billion. The valuation of data analysis company Databricks Inc. jumped to $38 billion last month, from $28 billion in February.
“The reason the valuations are so high is the growth is so high,” said Steve Mullaney, the chief executive officer of Aviatrix.
Before joining Aviatrix, Mullaney sold Nicira Networks, a company that pioneered the use of cloud-based servers, to VMware Inc. in 2012 for $1.26 billion. He came out of retirement to run Aviatrix, which was founded in 2014 by Sherry Wei, now the company’s chief technology officer.
The Santa Clara, California-based company projects revenue on an annualized basis will be $40 million by the end of the year and $100 million by the end of next year, Mullaney said. Its customers include Accenture Plc, Heineken NV, Sony Pictures Entertainment Inc. and United Airlines Holdings Inc.
Using the flexibility of the cloud
Once cautious of losing control of their data, many companies have come to appreciate the flexibility that comes with using the cloud. They can easily adapt to sharp changes in customer demand or extended power outages. The gap Aviatrix fills is ensuring a company’s systems work smoothly with the various clouds from Amazon.com Inc., Microsoft Corp. and Alphabet Inc. For example, routing, firewalls and logins can be particularly problematic.
Mullaney compared the major cloud services to all-inclusive vacations, which can let down customers who on arrival realize the amenities aren’t quite what they expected. “It looks like a dream, all you can eat, all you can drink,” he said. “And then you get there.”
TCV sees Aviatrix as a modern-day Cisco Systems Inc., which helped companies adapt to the internet era, but on a bigger scale. Companies work with so much more data now, and often across several cloud providers, said Tim McAdam, a general partner at TCV. “Those dynamics did not exist when Cisco was in its heyday,” McAdam said. “It’s a whole different magnitude of problem.”
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