Monday, May 1, 2017

Pakistani-American Co-Founders Sell Tech Startup Viptela to Cisco For $610 million

Cisco is paying $610 million to acquire Viptela, a software-defined-networks (SDN) start-up in Silicon Valley that was co-founded in 2012 by Pakistani-American entrepreneurs Amir Khan, Atif Khan and Khalid Raza.

Software defined network (SDN) technology allows network managers to configure, manage, secure, and optimize network resources quickly as needed via dynamic, automated SDN programs.

L to R Back: Venu Hemige, Khalid Raza Front: Atif Khan, Amir Khan, Ramesh Prabagaran Courtesy: Sequoia Capital

"Together, Cisco and Viptela will be able to deliver next-generation SD-WAN solutions to best serve all size and scale of customer needs, while accelerating Cisco's transition to a recurring, software-based business model," said Rob Salvagno,  Cisco's executive in charge of mergers and acquisitions.

Viptela's software-defined wide area networking (SD-WAN) technologies are enabling small and large companies tackle the ongoing transition from traditional client-server model to cloud computing efficiently and effectively.

Viptela was founded by 5 co-founders, three Pakistanis and two Indians,  in 2012 and had raised more than $108 million, including its most recent $75 million round just last May. The $610 million sale price offers a pretty good return for investors.

Prior to starting Viptela, the founders worked in different capacities for major network equipment companies including Cisco, Huawei and Juniper. One of the founders, Khalid Raza, is an alumnus of Karachi's NED University of Engineering and Technology.

Viptela and other companies in this space are benefiting from the continuing transition to a cloud-based subscription business.

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Ahmed F. said...

Quite a coup! And it warms my heart to see Indians and Pakistanis working together.

Firoz Shroff said...

Wonderful achievements be blessed

Riaz Haq said...

Cisco bought his first company for $74m. His second might be worth more

Atif Azim is an accidental entrepreneur. After his undergraduate at Imperial College, London, he was accepted for a masters in computer science at Stanford, which he gleefully accepted.

The plan was to finish his degree, find a well-paying, stable job and start paying off his humongous student debts. But what Atif – born in the United Arab Emirates to Pakistani parents – saw in San Francisco completely changed his outlook.

“The founders of Google were just six years our senior. Everyone around me was obsessed with building products and changing the world. The energy was contagious,” recalls Atif.

“And why not? One should always think big.”

After graduating in 1999, Atif decided to enter the field of technology consulting “just to get my feet wet,” and glean an idea of the emerging tech landscape in Silicon Valley. Approximately a year in, he quit to join Brience, a fast-growing startup that helped large enterprises customize mobile experiences for consumers.

Brience – which had raised US$200 million – was considered a hot prospect for an IPO. It had already started preparing for this inevitability by filing the requisite paperwork and conducting due diligence. But the dotcom crash hit badly and those plans were shelved.

“Some people may look at that and call it a failure, but I certainly didn’t. We learned so much from it,” he says.

Atif quit shortly after, along with a couple of other people, and started wireless security firm Perfigo. His first client? Stanford.

The initial problem it solved was to clear campus networks of all the malware that students would bring in on infected laptops and PCs after summer break. System administrators for universities would have to deploy tons of resources to remove all the bugs and viruses. It was a painful and time-consuming process.

Atif and team understood they were dealing with compliance issues. All they had to do to ensure a stable network was to check whether a user had the right policies and software installed before logging on.

Other universities across the west coast started noticing Perfigo’s work and signed up. With more paying customers on board, Atif’s company began to grow fast, eventually becoming a policy compliance firm checking for things like HIPAA compliance, and financial compliance, among others.

In 2004, network security leviathan Cisco acquired Perfigo for a cool US$74 million. At the time it had 31 employees and counted Greylock Partners as one of its investors.


Atif’s love affair with Cisco didn’t come to an end just yet. He was transferred to its Pakistan office, helping the tech titan sell products across the Middle East, India, Australia, and Japan. It was a cushy job that paid well.

But something was amiss.

“Life was getting too comfortable and I wasn’t creating enough local impact. Furthermore, I worked late nights and it was affecting my social life. I love Cisco but it’s hard to push them to do new things. I wanted to be back in the thrill of a startup,” he says.

It was around the same time that ride-hailing startup Careem, now valued at over a billion dollars and present in 50 cities, was beginning to find its feet. Atif knew Mudassir Sheikha, Careem’s CEO, from his earlier work at Brience and the duo were eager to work together.

VentureDive was born in 2011 after Atif quit Cisco to go back to building globally scalable products. The startup took a small equity stake in Careem in exchange for building its entire tech stack – meaning the app, website, and other digital platforms.

Riaz Haq said...

Cisco bought his first company for $74m. His second might be worth more

It turned out to be a prescient move for the former Cisco executive. Even a five percent stake in Careem – at a billion dollar valuation – is worth US$50 million today.

“It started in a small conference room with about four of us. The initial goal was MVP in six weeks. We had a crack team of developers. We did road testing, made sure the apps are working, and distances are calculating correctly. The thrill was definitely back,” he laughs.

Careem’s gone from strength to strength since launch in 2011, which wouldn’t have been possible without the support of Atif’s VentureDive providing technical support at every step of the journey. SimilarWeb says Careem’s app – which has approximately 20 million downloads – is more popular than Uber in the Middle East and North Africa region. That’s no small feat.

“You can find lots of people who can code. But having a mindset to build products that are globally scalable is a different ballgame,” explains Atif.

“Rollouts have to be live, there cannot be any downtime. To manage these things at scale we have an internal philosophy of building for 10 times anticipated traffic but planning for 100 times. The system architecture we build supports this.”

Careem’s partnership with VentureDive continued until July 2016, after which it simply acquired the team working on its app. Atif says one of the reasons behind the deal was to give engineers more ownership of the product – now they were entitled to things like equity and larger bonuses.

It could also have been to fulfill corporate governance requirements. A ride-hailing unicorn can’t simply outsource its tech indefinitely. A few months later, Rakuten led a US$350 million funding round in Careem.

But Atif is quick to point out that VentureDive isn’t an “outsourcing company.” Operating on a partnership model, the team won’t simply accept any contracts that come its way. Rather, it’ll pick and choose the clients very carefully.

“We try to be the technical partners and the thought partners. To build global products, you either have your own feet on the street or you team up with emerging companies you feel will make it big,” he explains.

He points to IslamicFinder, one of the largest Muslim communities on the web, as an example. The founders are based out of Saudi Arabia but have relied on Atif’s team to build the apps and sites that are used by millions of people today. Everything from the design philosophy to product updates is handled by VentureDive.

Unknown said...

Greatest achievement, proud of you sir .

Ahmed said...

Dear Sir

Thank you for sharing such useful and informative post, Sir I have some questions.

How many Pakistanis are mashallah working in Google, Apple, Microsoft and other IT companies in America and West? If they are working their then how many of them are holding key positions in these Companies?

Sir my other question is that is Careem(Car service) only has operations in Middle East and Pakistan?