There was a time not too long ago when billion dollar purchases of tech companies didn’t happen all the time. There was a time not too long ago when billion dollar purchases were never done completely with cash. Those days are behind us with the latest billion dollar acquisition being happening with Cisco buying Meraki, an enterprise wifi startup.
The company started as a research project at the Massachusetts Institute of Technology in 2006. They now supply larger organizations the infrastructure, hardware, software, and support to operate secure wifi networks on premises. Instead of having a huge IT department to operate it, companies, schools, and other organizations can outsource one of the most challenging aspects of wide-area internet distribution and management.
According to Techcrunch:
Earlier this year, an industry source leaked me financial data on Meraki from an all-hands meeting. It had quietly closed a $40 million funding round, was spending roughly $65 million a year, and it brought in $20 million dollars in Q2 2012 alone. Meraki had only raised $80 million in total before today’s acquisition, meaning early investors like Google, Felicis Ventures, and Sequoia may see a handsome return.