Cisco, the networking giant, which is headquartered in California, has agreed to acquire Meraki, a cloud infrastructure startup. Meraki is a cloud based platform which provides user friendly solutions, to gather better opportunities. The company has mastered in designing, manufacturing and selling networking equipments. The price at which Meraki will be purchased is $1.2 billion in cash, reports Josh Constine of TechCruch. Once the acquisition takes place, Meraki plans to expand scale-centric enterprise offering of Cisco.
Founded in 2006, Meraki began as a small research project in MIT. It provides the required software, with Wi-Fi networking and security devices to midsize companies, schools and organizations. Meraki will continue to operate and play a pivotal role in Cisco’s new Cloud networking venture at San Francisco.
While all these fiscal changes are taking place, the 330 employee company, Meraki will build innovative features in its products and services. The licensing of the company will not change and they won’t compel their customers to buy Cisco’s SmartNet service. The acquisition will fetch $ 3.6 million per employee which is a huge yield to the three co- founders and the employees. Before the acquisition, Meraki had raised $80 million totally. Google, Felicis Ventures, and Sequoia who are the investors of the company, will receive a handsome amount in return.
Cisco on the other side is keen towards the acquisition taking place. The VP of Corporate Development states in his blog post , "Our build, buy, partner strategy has always been driven by customer need and on capturing market transition.Today; we are excited to announce an important acquisition that addresses the rapidly occurring shift to cloud networking." He went on to say Cisco was attracted to Meraki because it is " growing exponentially with great margins", as reported by Josh Constine of TechCruch.