Solo.io reaches $1B valuation with $135M Series C investment

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When you think of Service Mesh, some of the esoteric cloud native tools designed for stitching different microservices together, you might not think it’s the most attractive side of the Kubernetes-led cloud native market. , but you would be wrong. Today, solo.io, a Cambridge, Massachusetts service mesh startup, announced a $135 million Series C at a rough valuation of $1 billion.

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Altimeter Capital led today’s round with participation from existing investors Redpoint Ventures and True Ventures. By the way, this valuation is 10 times higher than their previous valuation at the time of their $23 million Series B round in October 2020 and brings the total raised to $171.5 million.

While founder and CEO Idit Levin says the company he started in 2017 expects the rise of the service mesh market in general, he doesn’t see his company focusing strictly on that particular technology. .

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“We predicted everything that would happen in the market and honestly the service trap is catching on like crazy. But I would say Solo [strictly] A service mesh company, to me is like saying Amazon only sells books. This is where we started, and whatever we need to do, we will do and go with the market,” she said.

The company made some early bets on the open source Envoy Proxy and Istio Service Mesh, both projects that have become leaders in this space, and the company has been a major contributor to both from the start, which puts it in a good position. To build commercial products on top of these projects.

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More recently, Solo released an updated version of the Glue Mesh technology. The startup was able to combine an API gateway and service mesh into a single control plane, greatly simplifying the management of these technologies.

As they grow, as you would expect, the team is also growing with around 70 employees. She said that her strategy has been to hire youth and teach them the business and it is working well.

In terms of diversity, she says that as a woman with a highly technical background, she sometimes gets frustrated with tokenism. “I have never asked anyone to give me this exemption because I am a woman. Actually, sometimes it has been troubling. Oh, we want to give you one thing because you are a woman. This annoyed me. You need to speak to me because I am very good, ”she said.

As she builds her company, she’s trying to find more diverse candidates. Her current group of engineers is 30% women, which is high by tech company standards, and she constantly seeks out historically underrepresented groups as she hires.

“There’s a lot of diversity in our company. […] I think it’s contributing [our success]. We’re reaching out to women in tech and people of color in tech, so we’re definitely trying. we are going to visit [and other places] and looking [diverse] People. And that’s what we’re trying to do and of course that’s what we want to achieve.”

While Levine didn’t want to share specific revenue numbers, she said the company’s goal for FY2021, which runs through February, was to triple its ARR from the previous year, and that they would be able to do so by the end of Q2. Were. fiscal year, putting them on track for some explosive growth. And part of that, she says, is because companies have been signing up for Solo’s products for years. In fact, 35% of their contracts are for 2-3 years, accounting for over 100 contracts so far.

This may explain why investors wanted to put so much money into this company and value it so much. Levine says she wasn’t looking for funding, but that customer demand is growing so fast, and the fund will enable them to accelerate and sustain the growth they’re experiencing.

“Basically there was no reason to take the money. I guess I took it because we wanna handle it [the entire] market, and we need to grow. There are a lot of demands and we need to scale up dramatically, and that is the main reason we took this round,” she said.

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