Alkira connects with $100M for a solution that connects your clouds

As cloud adoption continues to surge towards the $1 trillion mark in annual spend, we’re seeing a wave of enterprise startups gaining traction with customers and investors for tools to help manage that usage. In the latest development, a startup called Alkira has raised $100 million for “network infrastructure as a service”, which lets users virtualize and orchestrate hybrid cloud assets to manage them as a whole.

Tiger Global Management, a new backer of the startup, is leading this Series C, with other new backers NextEquity Partners and Geodesic Capital and previous backers Dallas Venture Capital, Sequoia Capital, Kleiner Perkins and KDT (Koch Disruptive Technologies) also participating.

Alkira’s CEO Amir Khan is not disclosing the startup’s valuation except to say that it’s “certainly an upround.” PitchBook estimates that Alkira was last valued at $234 million, although that dates from a funding round back in 2020 and the company has grown since then. Its customers come from a range of verticals like industry (strategic backer Koch), financial services (S&P) and media (Warner Music), and the company has raised $176 million to date.

The crux of what Alkira is addressing is one of the thornier aspects of the cloud revolution. To hedge their bets, get the most competitive pricing by region and to lean into the most flexible arrangements, customers are typically taking a hybrid approach when it comes to cloud networking, using multiple vendors and in many cases running private, public and on-premises servers all in tandem depending on their needs.

The problem with that, though, is that buying, implementing and ultimately managing that plate of spaghetti can prove to be an indigestible nightmare. The spike in popularity of AI-based applications – which might require even more compute and other resources – is certainly exacerbating this issue, but it’s one that has persisted for years and will continue to, regardless of whether AI is here to stay or not.

As Khan described it to me, Alkira’s unique approach is based on the idea that while end users negotiate and manage their own compute deals, the architecting of those deals is then handed over to Alkira, which essentially integrates them behind the scenes so that they can be managed and viewed as a single service, a kind of orchestration and virtualization of an organization’s infrastructure on a grand scale. (Alkira can support integration with all major cloud providers, Khan told me.)

It then offers users a range of services around that integrated, network-as-a-service experience: cloud backbone as a service (aimed at hypercalers and heavy activity); extranet as a service (end-to-end secure connectivity for customers and other third parties, created as and when it’s needed to interface with organization’s core network); cloud “insights” (visibility services for ops people to get a complete picture of the availability and usage of cloud network resources); and secure connectivity (aimed at enabling secure remove VPN access).

Khan claims that running a company’s network assets through Alkira can cut down years of integration and management work into hours.

One customer, he recalled, faced “a mess of day to operation troubleshooting, visibility, and routing controls. Everything was so tedious, and it took them two years to build that system… In our first meeting with them, sitting in a conference room with them in Reno, Nevada, we were able to replicate all that work in four hours.”

Out of that meeting, they won not just the business pitch, but an investor: the end user was Koch Industries.

Khan co-founded Alkira with his brother Atif (the CTO), and together the two have years of experience working in the world of telecoms – a wonderful training ground, it turns out, for the incredible fragmentation of today’s cloud computing landscape. (“Alkira” is an Aboriginal word roughly meaning “bright, blue sky” – a reference to clearing up the darkness of today’s “clouds.”)

They previously founded another startup that was closer to that legacy networking space: Viptela, a specialist in software-defined wide area networking, was acquired by Cisco for $610 million in 2017.

This new turn into cloud computing puts Alkira up against whole different wave of would-be competitors, although for now the very biggest players, like AWS, Azure and Google are yet to make significant progress in working together, thereby leaving a very wide opening for third-party players to do the stitching and virtualizing for them.

It’s interesting to see Tiger Global leading this round. The firm continues to be a investment player although as you can see by this table (from PitchBook data), the firm’s activity has really dropped off a cliff in the last two years, making this deal all the more significant in that context.

The combination of a proven track record plus obvious market opportunity seemed to get Tiger over the line on this one. “Increasing cloud and A.I. use is also increasing the complexity, velocity, and scale requirements of network infrastructure,” said Rohit Iragavarapu, and investor at Tiger Global, in a statement. “We believe Alkira is well positioned to unlock the growing potential of this rapidly evolving space with its visionary approach, market traction, and cutting-edge technology.”