Cradlepoint recently secured $89 million in additional funding, which is being used in 5G development and international expansion.
WAN networking specialist Cradlepoint been focused on cloud managed routing solutions for 4G LTE, and is gearing up for the move to 5G. They announced an additional $89 million in funding earlier this month, which will go to 5G development, as well as international expansion. Their presence in Canada has already seen significant recent expansion, where their sales have more than doubled over the last year, with the assistance of a more diverse partner network.
Cradlepoint has been in business since 2006, starting in the consumer space, but quickly moving into the 4G LTE space, where they still have the largest share of the market. More recently they have been adding new applications and upgrading their platforms in preparation for the move to 5G.
“We have been focusing on advancing our platforms because having the right hardware is critically importance to maintain enterprise grade connections,” said Lindsay Notwell, Cradlepoint’s VP Carrier & International Business. Last year, he was asked to add management of Canada to his bailiwick, so he is now the VP and GM of Canada as well. “We just launched the IBR900, which is a successor to our original product, and even though it only has a 4G radio in it, it is engineered for 5G. The guts are designed for the 5G world, so you just replace the radio when it’s time.”
The other recent initiative has been a significant increase to their portfolio of cloud-based application offerings.
“We have introduced a number of applications around security, including Secure Web Gateway, which came from ZScaler, to get content filtering and malware protection,” Notwell said. “Eighteen months ago we acquired a next-gen software-defined networking company Pertino, as we were moving into software defined networking. A lot of SDN players are focused on the branch office, but that’s only one of three key use cases for the enterprise, the others being people – mobile use – and the Internet of Things. NetCloud Engine is our software-defined overlay that provides sessional continuity for people, places and things.”
Notwell said the cloud, mobility, and the Internet of Things are bringing about major digital transformation, and the funding infusion was all about providing capital to exploit this transformation. As connectivity is key to digital transformation, he said that Cradlepoint’s strength in cellular connectivity positions them well in this transition.
“There is a big spectrum of players in the cellular connectivity market,” he stated. “On the one hand, you have the cheaper players, mainly from Asia, with low-cost consumer-oriented devices, which are not enterprise capable, and which are weak in security. On the other end, Cisco and Juniper are enterprise capable and secure, but are not good in cellular because they haven’t focused on it. We occupy that very unique space between the two. Our strength in cellular connectivity, and the fact that we understand the needs of the enterprise, attracted some interest from Tier One VC firms and facilitated our funding.”
The new capital will go mainly into engineering resources for 5G, and expansion outside of North America.
“We led in 4G and we intend to lead in 5G,” Notwell said. “That takes time, effort and engineering, with the bulk of the latter being on the software side, and we are significantly expanding our engineering team. In our expansion beyond North America, we recently expanded into Europe, with an office outside London, and also now have offices in Japan and Australia.”
In the Canadian market, Cradlepoint has had a presence for years, but whereas it was once heavily focused on big carriers, particularly Rogers and Telus, their channel has become more diverse.
“It has evolved considerably,” Notwell said. “We are up around 200 partners now in Canada, and we’ve seen an expansion of our value added-channel, which provides a lot of solutions in areas like content filtering and Point-of-Sale integration that the carriers just don’t do. We’ve added a lot of these skills to our channel. We often find ourselves on three legged sales calls with a carrier and a partner. We’ve also added MSPs like Radiant. At the same time, we find that the carriers have become even more interested in us.”
The business in Canada has taken off as a result.
“Canada has been underindexed, so the opportunity was significant, but we are really seeing tremendous growth,” Notwell said. “While there are a lot of players, there has been a lot of focus on that sweet spot in the cellular space. We have doubled our staff in Canada over the last six months. We doubled our revenues in Canada from 2015 to 2016 – and our Q1 2017 revenue in Canada was the same as the second half of 2016. People in Canada, especially those in remote areas, really appreciate our solution.”