Network virtualization specialist Midokura has just raised $20.4 million in Series B funding in order to fuel further growth in a highly competitive market.

The round was led by Japanese investment firm Simplex Inc., with participation from previous investor Innovation Network Corp., and Allen Miner, a Midokura director. The round brings Midokura’s total funding to a cool $44 million.

Midokura officials said the new funds will be used to accelerate innovation and development of the company’s Midokura Enterprise MidoNet (MEM) software. The funds will also help the company to seek out fresh talent for its development and executive teams, and find new partners for its products.

MEM is described as a software network that’s able to run on a variety of vendor’s hardware – in other words, it’s an overlay software-defined networking (SDN) network that can be used with OpenStack private clouds. The technology works to create an intelligent software-based network abstraction layer that resides between the hosts and physical network by decoupling the OpenStack cloud from the network hardware. Midokura offers two versions of its solution – an open-source version that’s free to use, and an enterprise production version that’s priced at $1,899 per host and comes with support and services from Midokura plus additional support for third-party technologies, such as VMware Inc.

Midokura says its solution has been adopted by companies in over 120 countries, with Blue Jeans Networks, Overstock.com and Puppet being some of its most high-profile customers.

“The network is the enabler of a connected lifestyle, including connected cars and connected devices,” said Tatsuya Kato, co-founder and chairman of Midokura. “With the wholesale re-imagination of global industries, from commerce to financial, travel and transportation, software gives rise to a new class of applications that demands higher levels of network agility and performance.”

Midokura also has several big name partners, including Dell Inc., which offers MidoNet as an option under its Open Networking initiative, and Fujitsu Ltd., which is planning to integrate MEM within its OpenStack-based cloud architecture at the expense of the OpenStack Neutron plugin component.

Midokura is now well positioned to reap the benefits of the substantial growth that analysts are expecting to see in the software-defined networking (SDN) space, said company director Miner, who took part in the latest round. He drew attention to a recent forecast from International Data Corp. (IDC), which predicts the SDN market will be worth $12.5 billion by 2020.

“Midokura has a savvy executive team focused on staying on the forefront of this market,” Miner said in a statement. “A game-changing vision, laser-like focus and A-team are the tenets of a great startup, and this is what I see in Midokura.”

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