UPDATED 07:00 EDT / JANUARY 27 2021

INFRA

DriveNets reels in $208M for its container-based carrier networking platform

DriveNets Ltd., a startup developing a software container-based networking platform for carriers, today announced that it has raised $208 million in funding at a valuation exceeding $1 billion. 

D1 Capital Partners led the round with participation from Atreides Management as well as returning DriveNets backers Bessemer and Pitango. The last two firms have made “significant follow-on investments,” according to the startup. Bessemer and Pitango previously jointly led a $110 million funding round for DriveNets in early 2019.

Israel-based DriveNets provides a software platform that carriers and cloud providers can use to manage their networks. AT&T, one of the largest carriers in the U.S., disclosed late last year that it has adopted the platform to help manage its data traffic. DriveNets is hoping to use the new $208 million in funding to expand geographically and win deals with additional service providers around the world.

Large organizations such as carriers traditionally built their networks using pricey proprietary appliances that combine hardware and software in a single integrated package. DriveNets’ networking platform, in contrast, doesn’t come as part of a traditional appliance but can be deployed on low-cost commodity gear that’s more affordable than proprietary hardware. The result, DriveNets says, is a reduction in infrastructure expenses for customers.

The startup implemented its platform as a set of container-based microservices to allow for efficient scaling. When carriers using DriveNets’ platform need more capacity to meet user demand, they simply add more commodity networking gear to their network. The equipment comes from hardware makers that DriveNets itself certifies and the startup also trains the channel partners charged with setting up the hardware at carriers’ sites.

After the deployment is complete, a carrier can deploy its own custom networking applications on top of the platform. The startup says the platform allows customers to run, among other things, core routing applications, which are the applications responsible for managing the most important and highest capacity data routes in a carrier’s network. Those data routes are collectively often referred to as the internet backbone.

Customers can also use DriveNets’ software to build other kinds of applications, such as services to handle so-called edge provider routing. That’s a process wherein a carrier forwards data traffic to another internet provider, which is often necessary to enable connections between devices far apart from each other.

DriveNets positions its platform’s application capabilities as a way to ease 5G rollouts. For the telecommunications sector, a key benefit of 5G is that the technology can enable carriers to bring new revenue-generating offerings to market, such as  edge hosting services and highly customized internet packages tailored to specific customers’ needs. Providing such features requires deploying a fleet of network applications to manage the behind-the-scenes operational details. 

DriveNets has raised more than $320 million from investors to date.

The idea of replacing proprietary systems with lower-cost commodity gear is also gaining traction in other parts of the telecommunications market. Historically, the antennas and base stations that connect subscribers’ devices to carrier networks used proprietary computing hardware to process the incoming data traffic. Using a technology known as vRAN, carriers are now replacing that hardware with commodity servers capable of performing the task more efficiently.

Image: Unsplash

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