Wireless Services Vendor Meraki Eyeing IPO

According to market researcher Infonetics the global wireless LAN equipment market rose to a record high value of $893 million in the last quarter of 2011, recording sequential growth of 1% over the Q3 value of $880 million. Analysts believe that continuing declines in equipment prices will lower the growth rate of the market over the next few years. But that hasn’t slowed the progress of wireless services provider, Meraki, which may be looking to fuel growth through an IPO.

Meraki’s Financials

San-Francisco–based Meraki was founded in 2006 by MIT PhD students Hans Robertson, Sanjit Biswas, and John Bicket, who began working on it as a research project. Soon it grew into a developer of intelligent cloud-managed networking solutions that simplify enterprise networks. Their offerings help organizations secure mobile devices, such as iPads, in an enterprise and build Wi-Fi networks.

Meraki is known for its simple browser-based dashboard that can be accessed over the Web and lets CIOs and other technology professionals of a company manage multiple wireless hotspots. Meraki’s offerings enable organizations with multiple branch offices, retail locations, or a large area to troubleshoot network problems remotely. Its dashboards help manage Meraki wireless access points, security appliances, and access switches.

Today, Meraki offers the complete cloud management suite, including wireless LAN, Ethernet switches, and security appliances. It has a customer list of more than 20,000 customers worldwide with names such as MIT, Stanford, Starbucks, and Accor North America to boast of.

Meraki is largely venture funded. It has received $80 million in funding from investors that include Google, Felicis Ventures, Rajeev Motwani, Georges Harik, Sequoia Capital, DAG Ventures, and Northgate Capital. Its latest round of funding was held in July 2012 and raised $40 million from Sequoia Capital and Northgate Capital.

Meraki’s financials are largely unknown, but management claims that the company is profitable. Revenues grew 150% over the previous year during the latest quarter. Meraki attributes revenue growth to the adoption of iPads and mobile devices, which in turn has led organizations to develop “bring your own device” (BYOD) environments. During the last quarter, Meraki added more than 3,000 customers to its list.

Meraki’s Product Development
Meraki continues to improve its product offerings and recently released new hardware products, including a small branch security appliance with integrated Wi-Fi, MX60W, and a wireless gateway for teleworker and remote enterprise users, Z1. Meraki’s new offerings add flexibility to its existing network solutions.

The MX60W is an access and security solution for small branches that comes with enterprise wired and wireless connectivity, next generation firewall, Auto VPN for one-touch creation of site-to-site virtual private networks, content filtering, and intrusion detection (IDS). The Z1 integrates networking, security, and high speed wired and wireless access into a compact design that offers dual-band, dual-concurrent Wi-Fi , Auto VPN, 3G/4G failover, and robust identity-based access policies.

It also released a new software update for wired and wireless products that includes Apple Bonjour Gateway support and comes with enhanced security and network visibility.

Meraki’s strong product offering has helped the company to grow at a pace that, according to Gartner, is “faster than the market.” The market is looking forward to the IPO. The company hasn’t divluged any details, but analysts believe that it is on the horizon.