It Only Took 10 Months For These Guys To Make More Than $10 Million

Business Insider has just learned that the tiny startup, with less than a dozen employees, walked away with "way more" than $10 million, according to a source close to the company.

We're not sure how much more but our best guess: $50-$100 million. That's because another SDN startup, Contrail Systems, was bought in December by Juniper for $176 million, just two days after it launched. It had raised $48 million in VC funds.

Neither F5 nor LineRate officially revealed the terms of the sale but our source told us it was in line with other acquisitions in this hot "software defined networking" market. We were also told that it was one of the biggest tech acquisitions in Colorado since HP bought a company called LeftHand Networks in 2008 for $360 million.

Whether $10 million or $100 million, that's still a pretty good haul for the LineRate crew. Cofounders John Giacomoni and Manish Vachharajani invented the tech during their post-grad work at Colorado University. They hired CEO Steve Georgis and raised $4.75 million in a seed round led by Boulder Ventures.

The feeding frenzy on SDN startups began when VMware bought Nicira, the market leader, for $1.26 billion in July. Nicira had raised about $50 million and had come out of stealth five months earlier.

Since then, SDN startups have been the darling of the enterprise tech world. In October, Nicira's biggest competitor, Big Switch, landed $25 million in financing. Plexxi came out of stealth in December backed by $48 million. In August, SDN startup Plumgrid landed $10.7 million.

SDN is a new technology that disrupts the $50 billion networking equipment market. Instead of buying expensive routers and switches with a lot of fancy features from the likes of Cisco or HP, companies can buy simpler, cheaper hardware—and less of it. All the fancy control stuff is handled by software. This makes networks more flexible and less expensive than they are today.