Participated · Series A · Apr 2013

Midokura develops network virtualization software focused on the OpenStack ecosystem, offering both an open source edition and a paid enterprise version. The enterprise product (priced at $1,899 per host) includes enterprise support and compatibility with VMware vSphere and the ESXi hypervisor. Its customer roster includes Dell, Blue Jeans Networks, Overstock.com and Puppet. The company plans to expand into the container market by adding support for the Kubernetes container management platform. Midokura says its platform’s multi-platform support (OpenStack, VMware, etc.) is a competitive advantage because enterprises often run multiple technologies. Financially, the company has raised a total of $44 million to date and currently employs about 50 people; management intends to spend the new funding conservatively and does not plan significant headcount expansion. Midokura sells MidoNet, a software-defined networking and network virtualization offering that integrates with popular cloud platforms to simplify cloud networking, scalability, automation, and isolation. The product targets cloud service providers, hosting providers, mobile network operators, large enterprises and smaller companies building private clouds. The company launched a beta of MidoNet in October 2012 and has generated considerable interest since. Midokura has offices in San Francisco, Tokyo, Lausanne and Barcelona and is preparing for broader deployment and expansion. Management is shifting roles as co-founder Tatsuya Kato moves from CEO to chairman and former CTO Dan Mihai Dumitriu becomes CEO. The company plans to use recent funding to hire engineers, deepen the technology, add features, improve management capabilities, and integrate with other technologies and partners. Tokyo-based Midokura's core product is Midonet, a network virtualization control layer that runs on top of existing IP networks and lets users create virtual layer‑2 switches, routers, load balancers and firewalls via a UI or API. Virtual network topology is independent of the physical layer, so virtual machines can be moved across infrastructure while the virtual network follows automatically. Midonet components are described as fault tolerant with no single point of failure and are designed to scale out on commodity hardware, which the company says can reduce infrastructure costs. The platform can be delivered via integration into existing products, as a standalone solution, as NaaS, or through Midostack — Midokura's OpenStack (IaaS/EC2) distribution and primary delivery mechanism. Midostack is currently in a limited beta for pilot projects. The company is expanding aggressively worldwide, with an office in Europe, a San Francisco office slated to open this summer and possible plans for Singapore later in the year, and is actively hiring; it raised $1.3 million in seed funding and is seeking a Series A this year.