Investment Thesis: Why March Capital Went All in on Nile
As investors, we’re rarely presented with a simple idea big enough to disrupt one of the largest industries in the world, let alone by a team with the ability to pull it off. This was the case of Pankaj Patel, John Chambers, Suresh Katukam, and Sri Hosakote’s ambition for Nile – to redefine enterprise networking technology by delivering it as-a-service.
Pankaj and John have been close friends of and collaborators with March Capital for many years and we were privileged to formally onboard Pankaj as March Capital’s Venture Partner and Strategic Advisor in 2017.
Before March, Pankaj spent nearly 14 years at Cisco, most recently as EVP and Chief Development Officer, overseeing its $38 billion product and solution portfolio and global team of over 26,000 engineers. During that same time, Co-Founder John Chambers (former Cisco CEO and Executive Chairman), was leading Cisco to become one of the most valuable companies in the early 2000s and the market leader in network IT.
After John and Pankaj left Cisco, Pankaj frequently shared his goal of recreating and simplifying the technology stack he’d helped build during his tenure. Understanding the complexity and necessity of the technology, it was clear to Pankaj there was an incredible opportunity to transform the networking market.
Over the last 30+ years, internet connections have become omnipresent. While internet applications have seen unprecedented innovation in the 21st century, infrastructure innovation has stagnated. During this time a few companies (i.e., Cisco, Juniper, Aruba Networks / HPE) have dominated the market, deploying the same first-generation hardware and switches into homes and businesses even as the workloads they supported exploded in sophistication.
The market for wireless hardware and switches has grown to approximately $25 billion / year today. While a staggering sum, it’s a small portion relative to an estimated $75 billion / year spent on maintaining the network. The once simple networking product has become incomprehensively complex because of decades of incremental technology and one-off customization add-ons.
To navigate through this complexity, it’s vital for organizations to engage with a large ecosystem of partners, resellers, and managed service providers (i.e., Accenture, Infosys, AT&T, etc.) to architect networks, source the hardware, and manage and maintain the network once its running. Despite giant in-house IT teams, expensive service providers continue to be indispensable for deployment.
Unsurprisingly, complexity stalls progress. The process for designing, installing, and running an enterprise network hasn’t improved since the 1990s. Enterprises still spend countless hours on vendor discovery, manual and error prone configurations, assessing headcount requirements, and mitigating unexpected downtime. In North America, it is estimated that over 70% of all network downtime is a result of human error during configuration.
Enter Nile, a new network solution disrupting the status quo by going directly after the $75 billion / year of operational expenses spent on networking today. With Nile, customers simply say where they want the service and the rest is handled, from procuring, installing, and configuring, to life cycle management. This more secure, reliable, and faster service allows in-house IT teams to focus on more critical issues outside of troubleshooting the network.
We estimate Nile’s target customer profile covers over 90% of organizations in the US. This means any organization with as little as 100 employees to those with multiple campuses housing up to 100,000 employees and / or students each, across all verticals (i.e., tech, healthcare, education, industrial, etc.) are the right fit for Nile. A few larger enterprises with massive budgets may have the capability to build a like network in-house over time. However, those who choose to move with speed and prefer tried and tested technology will look to Nile.
We spent countless hours with Pankaj and John over the years, often serving as the sounding board while they turned this idea into a business. Though they’ve worked together for nearly 25 years, there are more important attributes to this star team that explain why they have the foundation for a successful partnership. Not only do they share the vision and ambition to revolutionize this industry, but they also share the focus, ability to execute, and capacity to attract top talent. After getting to know the team, and evaluating the market opportunity and service / technology, investing in Nile was a no-brainer.
- Team: Engineering experts Suresh Katukam (former Head of AI/ML and IoT Ecosystem Development at AWS) and Sri Hosakote (former Cisco Engineering SVP and Seagate Cloud Systems and Solutions EVP) join Pankaj and John on the founding team. Despite being in stealth, the leadership team has successfully attracted a high-quality team of 170 individuals, comprised of ~100 engineers who bring deep networking technology experience.
- Market Opportunity: Each year organizations worldwide spend a staggering $75 billion in operational expenses and an additional $25 billion in enterprise networking hardware. Nile’s approach to networking is disrupting that $75 billion / year in the same way AWS transformed storage and compute: by stripping away disadvantageous complexity and building an as-a-service platform, delivered in the cloud.
- Service / Technology: Nile offers an easy to deploy, no human intervention required, SLA-based service like a utility: always connected, always on, always secure, and as a service. Nile achieved this from day one by building with the principles of Zero Trust, stability, security, and scalability. Nile’s customers receive true network-as-a-service consumption, built in hardened security, lifecycle management without the management, and backed by the industry’s only verified, performance-based SLAs.
We consider ourselves extremely fortunate to have a front row seat to Nile becoming what we believe will be one of the most transformative companies in Silicon Valley. While we recognize there is a lot of work left to get there, Nile has the right technology, leadership team, and supporting cast of advisors and investors to execute on the vision.
Congratulations to the entire Nile team for emerging from stealth on September 14th! We are excited to continue supporting Nile in redefining the enterprise networking industry.
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