f5 snags volterra multi-cloud management startup for $500m

Networking solutions provider F5 has revealed its acquisition of Volterra, a firm specializing in multi-cloud management, in a transaction valued at $500 million. This sum is comprised of $440 million in immediate cash payment, alongside $60 million allocated for deferred and unvested incentive compensation.

Volterra initially launched in 2019 following a $50 million funding round supported by various investors, including Khosla Ventures and Mayfield. Strategic investment also came from M12, the venture capital arm of Microsoft, and Samsung Ventures. The company previously explained its core offering as:

A unified approach to overseeing security, operational aspects, and management functionalities.

F5’s President and CEO, François Locoh-Donou, anticipates Volterra’s edge technology will seamlessly integrate throughout F5’s existing product portfolio. “Volterra allows us to further develop our Adaptive Applications strategy with an Edge 2.0 platform designed to address the intricate multi-cloud challenges faced by our enterprise clients. This will enable us to deliver a SaaS-based solution that directly tackles our customers’ most pressing concerns,” he stated.

Ankur Singla, founder and CEO of Volterra, explained in a company blog post regarding the acquisition that the demand for their solution intensified throughout 2020 as organizations rapidly transitioned to cloud-based operations in response to the pandemic. “At Volterra’s inception, multi-cloud and edge computing were largely conceptual, and investment was focused on identifying practical applications. Three years later, the COVID-19 pandemic has fundamentally altered the environment – it has expedited the digital transformation of traditional experiences and increased the volume of online activity. This surge in global internet usage has simultaneously created new vulnerabilities impacting the security and reliability of the applications we rely on daily,” he noted.

Singla believes Volterra’s strengths will complement F5’s current offerings, providing comprehensive solutions to these emerging challenges. Following a relatively quiet 2020 regarding mergers and acquisitions, this purchase builds upon F5’s significant acquisitions in 2019, which included Shape Security for $1 billion and NGINX for $670 million.

The acquisition has received approval from the boards of both organizations and is projected to be finalized before the end of March, pending necessary regulatory clearances.