Meraki Plans To Conquer Enterprise Wi-Fi, Hire Like Crazy With $40M In New Funding

An all-hands meeting at wireless network provider Meraki just closed with a bang: it’s raised $40 million and is now looking for a 100,000 square foot office according to my sources. The financing comes mostly from existing investors that likely include Sequoia and Northgate. Much of the $40 million is debt with the principal to be repaid within five years. Details on exact investors are still coming together because Meraki hoped to keep the round quiet as not to rile up competitors.

Meraki will use the funds to keep a cash cushion, pay for its new headquarters, and aggressively hire in sales so it can break away from competitors like Aerohive and Cisco. If all goes well, I hear an IPO is on the horizon.

For those less familiar, Meraki helps big companies, schools, and organizations set up their networks by selling them wireless LAN devices, security appliances, and the cloud architecture software that knits them together. It’s all designed to be easy to install and managed from a browser-based dashboard.

This new cash doubles Meraki’s total funding to $80 million from the $40 million it had previously raised through its Series C from Google, Sequoia Capital, DAG Ventures, and Northgate Capital. Investors were clearly impressed with Meraki, as I’ve learned the $40 million “only diluted the company 5%”.

A source close to the company says Meraki was spending around $65 million a year, and Q2 2012 saw the company rake in over $20 million — more than it was shooting for. The $40 million cushion will protect it in case expenditures rise for supporting its 20,000 customer networks or if it wants to rapidly pursue a new market.

As more huge organizations want powerful networks without giant IT departments to run them, Meraki sees its business booming. That’s why one of its latest hires is a new CFO that will prep it for an IPO. That’d be a pretty impressive run for what was just an MIT grad student project in 2006.