Arrcus adds Hitachi to its latest funding round

  • The virtual routing specialist raised $50m earlier this year
  • Now it has had a funding top-up from Hitachi Ventures and existing investors
  • The capital injection is a further sign of growing support for disaggregated network functionality

Hitachi Ventures is the latest investor to pump funds into virtualised routing vendor Arrcus, adding its name and cash to the emerging vendor’s Series D funding round that was initially announced in February this year. 

Arrcus, which is pitching its Arrcus Connected Edge (ACE) Multi-Cloud Networking (MCN) solution to network operators in the telecom, enterprise and cloud or datacentre sectors, had already raised $50m in the round, taking the company’s total funding to $125m – see Virtual routing vendor Arrcus raises $50m.

Now Hitachi Ventures has added to the pot. Neither party has announced the value of the investment, with Arrcus saying only that it is “significant”, but TelecomTV believes Hitachi Ventures has pitched in around $10m, with extra funds sourced from credit facilities to take the Series D total to around $15m. That, in turn, takes the cash raised by the seven-year-old vendor in all its rounds to about $140m. 

“This infusion of capital will empower Arrcus to accelerate its growth, expand market reach, and continue delivering cost-effective and transformational networking solutions to customers worldwide,” noted Arrcus in its latest funding press release

Shekar Ayyar, the virtual routing vendor’s chairman and CEO, noted: “Hitachi Ventures’ deep industry expertise and reach will strengthen our position as a leading provider of software-driven networking solutions. This investment further validates our innovative technology and signifies the immense market potential for which we are staking a claim.”

The investment is a further sign of support for companies developing disaggregated, software-based networking functions, and another boost for the virtual routing sector. Unicorn company DriveNets, also a player in the sector, has cemented a key role in AT&T’s network and has been deployed by KDDI in Japan, while also having raised $587m in funding. Another virtual routing startup, Volta Networks, was acquired by IBM in 2021.  

And Hitachi Ventures is certainly very keen on the Arrcus proposition, believing it is playing an increasing role in enabling the scale and flexibility needed in distributed data transport networks as applications, such as generative AI, put increasing strain on traditional network architectures. 

In a blog about its investment in Arrcus, the Hitachi Ventures team noted: “We believe Arrcus has achieved an inflection point in 2022 and is set to continue its growth in 2023 and beyond. The company serves enterprises in various industry verticals, including telcos or communication services, cloud providers and enterprises (retail, finance, SaaS and others). This strong performance indicates the market’s confidence in Arrcus’ product capability to capture the growing demand for next-generation networking solutions.”  

Arrcus is one of the companies that made it into the Futuriom 50, a report that identifies the most promising private technology companies in cloud and communications infrastructure (DriveNets, naturally, also makes the cut). You can access the report here.  

Futuriom founder Scott Raynovich also highlighted the Hitachi Ventures investment in Arrcus, noting in his analysis that Arrcus now has more than 40 customers and that “adding the Hitachi investment and global muscle is a big boost for Arrcus.” 

- Ray Le Maistre, Editorial Director, TelecomTV