Keen on proving its SDN with IaaS providers, Midokura raises $17.3M

In 2010, the founders of Midokura set out to become the top provider of public Infrastructure as a Service (IaaS) clouds in Japan, but they realized networking challenges stood in the way. So they decided to focus on networking, and in the meantime the software-defined networking (SDN) space got hot. Now Midokura is trying to rack up more large-scale customers, particularly existing IaaS clouds, to validate its software’s capabilities.

Toward that end, the company has secured $ 17.3 million in Series A funding, bringing the total the company has raised to $ 18.6 million. The Innovation Network Corporation of Japan led the round, which also included participation from NEC Capital Solutions and NTT Docomo Innovations Ventures.

Midokura’s software virtualizes the network to let OpenStack cloud-management software rapidly create virtual networks and manage virtual routing and switching. Unlike some SDN startups, Midokura’s software does not use the OpenFlow networking protocol. Midokura executives see Nicira as a major competitor, and to a lesser extent Big Switch, even though those companies incorporate OpenFlow in varying degrees. Since releasing a beta version of its overlay in October, the company has found a customer in one large unnamed technology company in the United States, said Midokura’s chief strategy officer, Ben Cherian.

Midokura executives are changing roles. Dan Mihai Dumitriu, chief technology officer and a co-founder, is becoming CEO, while the CEO until this point, co-founder Tatsuya Kato, is becoming board chairman.

Midokura has managed to develop a product and take on venture funding after realizing its IaaS dreams weren’t going to pan out — not immediately, anyway — and changing course. Now, with Microsoft, Rackspace and especially Amazon becoming larger IaaS providers, the move looks like a good one. If Midokura can sign up a few IaaS customers, it could capture a foothold in the SDN market, which does not yet have clear leaders.