Cisco puts $150m into start-ups

Cisco Investments, the corporate venture arm of Cisco Systems, the US-based networking equipment specialist, is increasing its investments in organisations outside its own market by putting a total $150m into two start-ups and an accelerator. 

The most pertinent of the three organisations receiving investment is Alchemist Accelerator, based at Stanford University, which received the largest chunk of the total $150m investment. Cisco was already an angel investor, and is now the founding backer a new internet of things fund for Alchemist start-ups. The accelerator differentiates itself from others by only accepting start-ups who are targeting businesses as clients, and not end-consumers.

One of the two companies receiving an investment is Ayla Networks, a California-based start-up that is working on the internet of things, such as a thermostat connected to a central control system for heating, ventilation and air conditioning. The Cisco investment is part of the companies series B, which has raised a total of $14.5m. The other company receiving an investment is Evrything, a London-based start-up that offers software-as-a-service to give physical objects online identities and manage them in the cloud. Cisco’s investment is part of its series A which has raised $7m.

The $150m follow the $100m which Cisco’s chief executive officer John Chambers committed in January for investments related to the internet of things.

Ravi Belani, Alchemist’s managing director, said: “There are entrepreneurs who are deeply passionate about creating big businesses around [the Internet of Things]. Cisco is moving forward as the lead where VCs are fearful to tread.”