Venture-backed Virtela Technology Services Inc. announced it has been acquired by NTT Communications Corp. for $525 million in cash. Virtela, which provides cloud network services, had previously raised $65 million in venture funding from Norwest Venture Partners, New Enterprise Associates, Newton Technology Partners and a number of other investors, according to data from Thomson Reuters (publisher of peHUB). Norwest led all the rounds in Virtela, which was founded in 2000 and incubated at Norwest’s office in Palo Alto, Calif. Promod Haque, senior managing partner at Norwest, currently serves as chairman of Virtela.
Virtela is the eighth portfolio company of Norwest to exit via acquisition or IPO in 2013. For more information about the industry’s year-to-date exit activity, VCJ subscribers can go here.
NTT Com Agrees to Acquire Norwest Venture Partners’ Portfolio Company Virtela
$525 Million Acquisition of Global Cloud Networking Leader is The Eighth NVP Liquidity Event This Year; Brings Combined Transaction Value to More Than $8 Billion
Palo Alto, Calif. – October 28, 2013 – Norwest Venture Partners (NVP) today announced that NTT Communications Corporation (NTT Com), ICT solutions and international communications business within NTT (NYSE: NTT), and Virtela Technology Services Incorporated (Virtela), a leading global managed and cloud network services company, have entered into a definitive agreement via NTT Com and Virtela’s shareholders. This is pursuant to which NTT Com has agreed to wholly acquire Virtela for a total transaction price of approximately $525 million (USD) in cash.
NVP is the founding investor and largest shareholder in Virtela. The company was founded and incubated by Vab Goel, general partner at NVP, who also served as founding CEO and Chairman, and currently serves as a board member. Promod Haque, senior managing partner at NVP, is a founding investor in Virtela, having provided the initial funding to the company. Haque currently serves on the board of directors as Chairman of Virtela.
“At NVP, we view the networking industry as a foundational pillar of technology innovation and continue to make game changing investments to drive this market forward,” said Haque. “Virtela is at the center of this trend with cloud technology, virtualization and a software-defined approach that has upended the traditional networking market. The company is delivering significant advancements that address issues of bandwidth, management and security at all levels of the stack.”“We founded and incubated Virtela to help companies break free from the constraints of traditional network architectures and services,” said Goel. “By combining Virtela’s approach with the reach and resources of NTT, we have the opportunity to provide a new global networking standard that is configurable, agile and can flex at the pace of today’s business.”
Goel continued, “The credit and success of Virtela really go to the employees, customers, partners and other co-investors for their unwavering commitment and belief in our vision.”
Virtela is a 400-employee company headquartered in Denver, Colorado with global operations and delivery centers in the U.S., India and the Philippines. The company serves more than 500 customers worldwide, including many of the world’s largest multinational companies. Combining Virtela’s advanced service/operational platforms and expertise with NTT Com’s global ICT infrastructure and resources creates an unparalleled company able to deliver cloud networking services, asset-light branch office networking, a Tier-1 IP backbone and end-to-end cloud compute, storage and network services on a global scale.
With the pending sale of Virtela, eight of NVP’s portfolio companies have achieved exit success in 2013, including three IPOs in the past five months – FireEye (NASDAQ: FEYE); RetailMeNot (NASDAQ: SALE); and Cyan, (NYSE: CYNI). These initial public offerings, in addition to the sale of 41st Parameter to Experian in early October, ScaleIO to EMC in July, Passif Semiconductor to Apple in April, and the partial sale of NVP shares of Shriram City Union Finance Ltd (SCUF: NSE INDIA) in January, have resulted in a combined transaction value of more than $8 billion.
To view NTT’s press release, please visit: www.ntt.com
About Virtela Technology Services Incorporated
Virtela, recognized by more than 100 awards for outstanding service innovation and customer support, is the smart alternative to traditional global carriers and equipment vendors for enterprise networking and virtualized IT services. The company delivers services via its Virtualized Overlay Network and Virtela Enterprise Services Cloud (ESC) platform, which enables the transition of branch office networking and security services to the cloud. Virtela gives enterprises the benefit of “asset-light” software-defined networking that delivers up to 80% cost savings in upfront capital and 30% savings in ongoing operating expenses.
Virtela is headquartered in Denver, Colorado, with global support centers around the world. For more information, visit www.virtela.net
About Norwest Venture Partners
Norwest Venture Partners (NVP) is a leading venture and growth equity investment firm that has partnered with entrepreneurs to build great businesses for more than 50 years. The firm manages over $3.7 billion in capital and has funded more than 500 companies since inception. Headquartered in Palo Alto, Calif., NVP has subsidiaries in Mumbai and Bengaluru, India and Herzelia, Israel. NVP makes early- to late-stage venture and growth equity investments across a wide range of sectors including: technology, information services, business services, financial services, consumer products/services and healthcare. For more information visit: www.nvp.com.