Plexxi To Dump $35 Million Funding Into Channel

Fast-growing networking startup Plexxi has nabbed $35 million in funding with plans to use the money to grow its channel program and go-to-market strategy around the software-defined data center market.

"There's no question that a lot of this is about our go-to-market, and since we're 100 percent channel, it's all going to be in the channel," said Richard Napolitano, CEO of Plexxi, in an interview with CRN. "We're going to be doing some hiring for people aimed at the channel and organizing road shows with Arrow [Electronics] with their partners this fall, creating strategies to launch through the channel and even onboarding the channel itself."

The Nashua, N.H.-based startup, who creates products and solutions for agile data centers, scale-out applications and distributed cloud environments, has raised a total of $83 million in funding.

[Related: CRN Exclusive: Plexxi CEO Talks New 'Next Era Converged Network' Switch, Major Revenue Growth In 2015]

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Napolitano is planning to grow its channel from a handful of partners upward of 50 within the next 18 months. To boost its channel partner numbers, Plexxi opted to be sold exclusively through Englewood, Colo.-based distributor Arrow, who is the biggest global distributor for both VMware and Cloudera.

Napolitano told CRN that Plexxi is changing the network architecture to enable hyperconverged offerings in the market, and expects to pull in more than 10 times the amount of revenue this year compared to last year due to some big federal wins.

Mike Gregory, founder and CEO of CloudGov Technologies, a Rockville, Md.-based Plexxi partner, said the $35 million in funding proves that Plexxi's technology is disrupting the market.

"The $35 million is validation that their technology is innovative -- a network solution that basically automates and delivers agility inside the data center which traditional networks haven't modernized in years," said Gregory. "The customers that see the value are getting tremendous amounts of benefits in leveraging the technology, and that’s resonating in market. That’s why investors see this true differentiating value that Plexxi brings to the table."

Plexxi recently released its second generation of switches, the Switch 2 Series, which consolidates the network fabric into a single tier to optimize east/west traffic. The switch itself is a converged network as it combines the leaf and the spine into one box, according to Napolitano.

"As we enter this next cycle of IT evolution, the channel needs fundamentally differentiated and disruptive technologies to put together to create a differentiated offer," Napolitano said. "So many of the larger IT companies are delivering fully integrated solutions, and the channel has very little to do in terms of developing that value proposition."

"Technologies like Plexxi, with other people's servers and other people's storage, now you have something that's highly differentiated in the marketplace, [and] that partners can leverage professional services and other things to build a very strong value proposition inside their accounts," he said.

Gregory said Plexxi's commitment to spend millions on the channel shows the company is placing its bet on its growing partner community.

"They see the value in partners that are in alignment with their vision and that want to bring this innovated technology to their customers," said Gregory. "The sky's the limit for them."

The $35 million funding round was led by a new investor, who was not identified, as well as from Lightspeed Venture Partners, Matrix Partners and North Bridge Venture Partners. Napolitano also said his company is seeking an initial public offering a few years down the line.