Three years after launching their first product, these former Cisco execs have sold their startup to Juniper for $405 million

Mist

Mist co-founders Sujai Hajela and Bob Friday

• Juniper Networks is buying a startup called Mist Systems for $405 million - less than three years after Mist launched its first product.
• Mist makes what it calls the first artificially intelligent WiFi system for businesses.
• Juniper is paying big bucks for Mist, but it gains a lot for the money: Mist was founded by two executives that helped build Cisco into a giant in the WiFi industry.

Juniper Networks on Monday announced that it plans to buy Mist Systems for $405 million.

Mist makes what it calls the first artificial intelligence-driven WiFi. Its flagship product delivers WiFi using high performance WiFi hardware, along with a cloud service.

The access points include some patented tech that helps the wireless network perform reliably. But it's the cloud service that makes Mist different. This service can analyze the network and do things like troubleshoot any problems with the help of an AI assistant named Maven.

It can also deliver location-aware apps, such that a business can grant access to apps or websites when the user is in the right place at the right time. For instance, when a traveler walks through the doors and arrives at the hotel's reception area, the WiFi can automatically pop up everything they need to check in.

Mist's founders helped Cisco rule a market

Mist was founded in 2014, and launched its first product in the summer of 2016.

Its claim to fame was that its founders, Sujai Hajela and Bob Friday, were some of the people that helped Juniper's oldest rival Cisco become a Wi-Fi networking powerhouse.

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Mist

Mist co-founders Sujai Hajela and Bob Friday

Meraki's subscription-based service has since become the model upon which Cisco is remaking itself, with a new focus on subscription-based cloud services.

At Cisco, the two execs knew they wanted to go out on their own and build a new kind of wireless network designed from the ground up with mobile devices in mind. But the key inspiration for the company came from Hajela's daughter, the founders told Business Insider back in 2016.

In 2014, before they tried to drum up a Series A venture capital investment, Hajela told his daughter about his newfangled Wi-Fi product idea, he said at the time. She told him, "Dad, that's too technical." She told him she just wanted a network that put whatever information she needed about wherever she was at her fingertips.

That idea, coupled with their backgrounds, helped them raised about $14 million in a Series A from Norwest and Lightspeed, on top of about a $500,000 seed round raised from Lightspeed. By the time they launched their product, they had 20 potential customers trying out their new take on WiFi.

Between 2016 and today they gained more customers including big names like Ikea, Okta, Raleys, PetSmart, Stanford and Juniper Networks. Their customers include two among the Fortune 10, seven of the top 40 retailers, a major facility at a large US healthcare system, a mobile carrier, and an airline.

Mist also raised $88 million, according to PitchBook, and was valued at at $246 million valuation as of their last raise in 2018. Investors included Mist's alma mater, Cisco Systems - meaning Cisco had to be aware and keeping an eye on Mist.

That also means that Juniper is paying a premium for Mist Systems of nearly $160 million more than its year-ago valuation. No doubt Juniper is hoping that Mist will be for it what Meraki was for Cisco: a way to sell more cloud services, with a business model built around recurring cloud subscription revenue.