The Tragic Conclusion of CDN Startup Instart


Instart, once a product innovation leader in the CDN industry has been acquired. Their website states “Instart is in the process of transitioning our technology and customers to an industry‑leading platform”. Read between the lines and there are two takeaways. First, there is no mention of employees, thus, we can conclude that employees are being laid off. Second, the industry-leading platform that is acquiring them is likely none other than Akamai.


  • Company: Instart
  • Raised: $140M
  • HQ: Palo Alto
  • Founded: 2010
  • # of Employees: ~111
  • Platform: CDN

Akamai is the only CDN that has deep enough pockets to acquire them. Cloudflare and Fastly could acquire them, being they are public companies but would never do so because their technology stack is superior in every respect to Instart’s. Also, there is no other company in the world besides Akamai that would acquire a CDN startup and not its employees, because they have thousands of their own. The core value of a CDN is its employees. Does the selling of IP and customers qualify as an asset sale?

The sale is of no surprise whatsoever. In fact, it should have happened two years ago. Instart has been struggling for years. In the fast-moving CDN industry, when a startup’s technology stack falls behind, winning new logos is difficult. The bad in all this, even some of Instart’s own execs failed to see it. In terms of industry impact, there is none. This transaction won’t move the needle in any direction for the industry or Akamai. Instart is a middle-of-the-pack CDN with an okay technology stack.

It’s a tragic end for Instart’s founders and employees. Hard to believe they raised $140M from the likes of Andreessen Horowitz, Kleiner Perkins, and others. For Akamai, it’s a bittersweet moment. In their early years, Instart Logic (previous name) made an enemy in Akamai by aggressively targeting their customers and some of their tactics were questionable. Also, the startup spent tens of thousands of dollars on advertising signs at airports, close to Akamai’s annual conference where all attendees would see it.

Instart had all the money in the world and tons of smart engineers on staff including Ph.D.’s. Why did they fail? Vision. They failed to see the future of where the industry was headed. Today, as the edge computing paradigm is accelerating at full steam, being a CDN is the best business model in technology. The CDN stack is a foundational technology that is supporting all next-generation cloud services including security, edge computing, AI, SD-WAN, etc.

Latest Update – February 21, 2020 8:24 am PT

It has been confirmed that Akamai is indeed the buyer. Uncomfirmed reports indicate the acquisition price was around ~$30M and Akamai retained ~28 employees.   

The Big Question

Instart is decommissining its platform, hence, customers must migrate to the Akamai platform. What happens if a customer, especially the smaller ones, don’t want to move over to Akamai? This is bound to happen.     

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