Aryaka, a provider of cloud-based private network for companies, plans to go public in 2018, aiming for a valuation of more than $1 billion, according Chief Executive Shawn Farshchi.
Aryaka, which helps enterprises connect branch offices around the world, expects annual recurring revenue of $50 million by the end of 2016, doubling to $102 million by the end of 2017, Farshchi said. Revenue in 2015 was about $24 million. The company, whose more than 500 customers include audio products maker Skullcandy, fashion house Gucci and Air China Ltd, expects to be profitable by mid 2017, the CEO said.
As more software companies offer services on the cloud, businesses are ditching public networking services provided by telecommunication companies and are adopting private cloud-based networking systems provided by companies such as Aryaka.
Investor appetite for cloud-related IPOs was underscored last month when data storage company Nutanix Inc’s shares more than doubled in their first day of trading, even though the company has never made a profit. Nutanix is valued at about $4.5 billion. Aryaka – which Farshchi describes as “a unicorn in the making” – has some way to go to match that.
Based on six to 10 times recurring 2016 revenue, the company is worth between $300 million and $500 million. According to research firm IDC, the software-defined networking market is likely to be worth about $6 billion in revenue in 2020.