Why Cisco is Paying a High Price to Acquire a Cloud Networking Startup

Cisco Systems’ acquisition of Isovalent, a cloud networking and security startup backed by Google and Microsoft, announced on Thursday, suggests that the enterprise software stock rebound is also boosting startup valuations in the sector.

Cisco, a pioneer in data center networking equipment that has shifted to serve cloud customers, is paying around $650 million in cash for the startup, or 32 times its annual recurring revenue, said a person with direct knowledge of the figure. That’s well above the average …

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