Meter Raises $170 Million to Revolutionize AI-Driven Networking Infrastructure

Meter, Networking Start-Up, Raises $170 Million

The DealBook Newsletter Our columnist Andrew Ross Sorkin and his Times colleagues help you make sense of major business and policy headlines -- and the power-brokers who shape them. Get it sent to your inbox. As Silicon Valley has obsessed over artificial intelligence, significant attention has been paid to technology underpinning it: advanced computer chips, large language models and so on. Less has been devoted to the pipes that help deliver A.I. -- networking equipment. But that has been changing, as companies and investors see the potential of improving relatively prosaic equipment like switches and access points to supercharge A.I. offerings. The latest sign is that Meter, a San Francisco-based start-up that sells packages of networking equipment, plans to announce on Thursday that it has raised $170 million at a valuation of more than $1 billion. The round, which was led by the venture capital firm General Catalyst and includes backing from the likes of Microsoft and Sequoia Capital, is further evidence that for many in Silicon Valley, networking is becoming a hotter investment focus. "Networking is an overlooked, yet crucial, aspect of the world's tech infrastructure," said Hemant Taneja, General Catalyst's chief executive, who led the firm's investment in Meter. "Networking spend is expected to grow massively in the next few years because of A.I. needs, and yet current networks are one of the biggest blockers" to growing A.I. computing power. To be fair, networking is already a big business: Cisco, the heavyweight in the field, has a $254 billion market capitalization, while Arista Networks has a $118 billion market cap. Those incumbents haven't been standing still either, with Cisco announcing this week that it was introducing a new generation of switches to keep up with huge data flows from A.I. services. But Meter has drawn significant support -- among its early backers were Sam Altman of OpenAI; Reid Hoffman, the LinkedIn co-founder; and Diane Greene, the former Google Cloud chief executive -- with its promise of a new business model for the networking business. Unlike traditional networking setups, which companies have to buy and maintain themselves at often high costs, Meter sells what's essentially an all-in-one subscription service. It puts together packages of its specially designed switchers, routers, security devices and other equipment, and remotely maintains them. Anil Varanasi, Meter's chief executive, said that the company's packaged approach made life simpler and cheaper for customers, though it had doubters in the beginning. "Everyone thought we were foolishly naïve in thinking we could build everything from the ground up," he said. (Mr. Varanasi and his co-founder, his brother, Sunil Varanasi, have long been interested in the business, having even moved to Shenzhen, China, in 2014 to study networking hardware up close.) The all-in-one approach helps create faster and more reliable networks, said Ravi Gupta, a partner at Sequoia and an early investor in Meter. That's especially important as companies increasingly rely on A.I. services. Meter's customers include warehouses, schools, the ride-hailing service Lyft and the hedge fund Bridgewater Associates. Aided by new funding, the company plans to start pitching data centers, where reliable networking infrastructure is a must. (It plans to expand geographically, across Europe, the Middle East and parts of Asia as well.) It's also working on further automating network operating: "Look at any business today," Anil Varanasi said. "They're under incredible pressure to do five-to-10 times what they have the resources for." Meter faces strong competition. Last month, for example, Cisco announced a major infrastructure partnership with Humain, a Saudi-backed A.I. company, and it is part of the United Arab Emirates branch of the Stargate data center project. Cisco's Meraki cloud-based networking management business already collects billions in annual revenue. But Mr. Varanasi, the C.E.O., said that the industry can support another player, and pointed to a new partnership with Microsoft as a sign that it can compete with bigger rivals. "Networking is one of only markets that have multiple $100 billion-plus public companies," he said.

Sam Altman-backed network infrastructure startup Meter raises $170M - SiliconANGLE

Sam Altman-backed network infrastructure startup Meter raises $170M Meter Inc., a startup that helps companies build corporate networks, has raised $170 million in funding from a group of prominent investors. General Catalyst led the round. Meter detailed in its announcement of the deal today that Baillie Gifford, J.P. Morgan, Microsoft Corp. and Sequoia Capital participated as well along with a number of other investors. Meter previously raised about $145 million in funding from a consortium that included OpenAI Chief Executive Officer Sam Altman. When a company opens a new office, its information technology team has to connect the facility to the corporate network. The task involves a significant amount of work. Administrators must determine what network equipment should be installed in the new office, deploy it and then connect the facility to other corporate locations. Meter promises to automate the task for its customers. The San Francisco-based company sells a portfolio of internally-developed networking devices. It offers switches, access points for providing wireless connectivity to workers and PDUs. A PDU, or power distribution unit, is a device that help reduce the number of power cables necessary to support network equipment. It doubles as an observability tool that can monitor metrics such as a switch's temperature and electricity usage. Alongside its networking equipment, Meter sells cybersecurity appliances. The devices filter malicious traffic and provide VPN, or virtual private network, features that allow workers to remotely log into business applications. According to Meter, its appliances can also isolate IT systems from one another to prevent the spread of any malware that may enter a corporate network. The company not only supplies customers with networking equipment but also installs it on their behalf. Furthermore, Meter can manage the broadband plans that an enterprise purchases from internet providers. Those internet providers' infrastructure is used to provide network connectivity between corporate locations. Meter provides a software platform that automatically fixes common technical issues. If an internet provider on which a company relies to link together its offices experiences technical issues, the software can switch to another provider. It also remediates wireless connectivity issues. When an access point goes offline, the software boosts the signal strength of the nearest working access point. Meter is currently developing an artificial intelligence model that will allow it to automate more troubleshooting tasks. According to the company, the algorithm features billions of parameters and uses technical data collected from its network infrastructure. Meter is training it using tens of thousands of graphics cards supplied by Microsoft, one of the investors in its latest funding round.