Application services company F5 Networks has acquired multi-cloud startup Volterra for $500m in a deal to boost its ‘edge 2.0’ platform offering.
The definitive agreement will see F5 acquire all issued and outstanding shares of privately owned Volterra. Broken down, F5 paid approximately $440m in cash and around $60m in deferred and unvested incentive compensation.
It brings the Seattle-based company’s acquisition spend to more than $2bn over the past two years.
Subject to regulatory approvals, F5 will gain Volterra’s suite of distributed cloud software solutions, which includes security and networking tools for the edge of an enterprise network.
F5 CEO and president François Locoh-Donou said that the deal would advance the company’s self-described ‘edge 2.0’ platform “that solves the complex multi-cloud reality enterprise customers confront”.
He added: “Current edge solutions are simply inadequate for today’s enterprise customers. It’s time to break out of closed edge systems that only perpetuate the pain of building, running, and securing apps.”
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In 2019 Santa Clara, California-based Volterra received $50m in funding from investors including Samsung Next Ventures and Microsoft’s Khosla Ventures.
“I am excited to work closely alongside François and the F5 team to help pioneer the evolution of the edge to deliver more adaptive, dynamic application experiences for all of our customers,” said Ankur Singla, founder and CEO, Volterra.
“With our platform, we will extend F5’s application security leadership to the edge, thereby expanding our combined reach in the fastest-growing segment of F5’s $28 billion 2023 total addressable market.”
The deal is F5’s latest move into software services, which had traditionally been focused on networking and hardware.
F5 has raised its revenue outlook in light of the Volterra acquisition. It expects first-quarter fiscal year 2021 revenue to be between $623m and $626m, marking 10% growth.