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Snyk bags another $200M at $2.6B valuation 9 months after last raise
When we last reported on Snyk in January, eons ago in COVID time, the company announced $150 million investment on a valuation of over $1 billion. Today, barely nine months later, it announced another $200 million and its valuation has expanded to $2.6 billion.
The company is obviously drawing some serious investor attention, and even a pandemic is not diminishing that interest. Addition led today’s round, bringing the total raised to $450 million with $350 million coming this year alone.
Snyk has a unique approach to security, building it into the development process instead of offloading it to a separate security team. If you want to build a secure product, you need to think about it as you’re developing the product, and that’s what Snyk’s product set is designed to do — check for security as you’re committing your build to your git repository.
With an open-source product at the top of funnel to drive interest in the platform, CEO Peter McKay says the pandemic has only accelerated the appeal of the company. In fact, the startup’s annual recurring revenue (ARR) is growing at a remarkable 275% year over year.
McKay says even with the pandemic his company has been accelerating, adding 100 employees in the last 12 months to take advantage of the increasing revenue. “When others were kind of scaling back we invested and it worked out well because our business never slowed down. In fact, in a lot of the industries it really picked up,” he said.
That’s because as many other founders have pointed out, COVID is speeding up the rate at which many companies are moving to the cloud, and that’s working to Snyk’s favor. “We’ve just capitalized on this accelerated shift to the cloud and modern cloud-native applications,” he said.
The company currently has 375 employees, with plans to add 100 more in the next year. As it grows, McKay says that he is looking to build a diverse and inclusive culture, something he learned about as he moved through his career at VMware and Veeam.
He says one of the keys at Snyk is putting every employee through unconscious bias training to help limit bias in the hiring process, and the executive team has taken a pledge to make the company’s hiring practices more diverse. Still, he recognizes it takes work to achieve these goals, and it’s always easy for an experienced team to go back to the network instead of digging deeper for a more diverse candidate pool.
“I think we’ve put all the pieces in place to get there, but I think like a lot of companies, there’s still a long way to go,” he said. But he recognizes the sooner you embed diversity into the company culture, the better because it’s hard to go back after the fact and do it.
Addition founder Lee Fixel says he sees a company that’s accelerating rapidly and that’s why he was willing to pour in so big an investment. “Snyk’s impressive growth is a signal that the market is ready to embrace a change from traditional security and empower developers to tackle the new security risk that comes with a software-driven digital world,” he said in a statement.
Snyk was founded in 2015. The founders brought McKay on board for some experienced leadership in 2018 to help lead the company through its rapid growth. Prior to the $350 million in new money this year, the company raised $70 million in 2019.
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Progress snags software automation platform Chef for $220M
Progress, a Boston-area developer tool company, boosted its offerings in a big way today when it announced it was acquiring software automation platform Chef for $220 million.
Chef, which went 100% open source last year, had annual recurring revenue (ARR) of $70 million from the commercial side of the house. Needless to say, Progress CEO Yogesh Gupta was happy to bring the company into the fold and gain not only that revenue, but a set of highly skilled employees, a strong developer community and an impressive customer list.
Gupta said that Chef fits with his company’s acquisition philosophy. “This acquisition perfectly aligns with our growth strategy and meets the requirements that we’ve previously laid out: a strong recurring revenue model, technology that complements our business, a loyal customer base and the ability to leverage our operating model and infrastructure to run the business more efficiently,” he said in a statement.
Chef CEO Barry Crist offered a typical argument for an acquired company; that Progress offered a better path to future growth, while sending a message to the open-source community and customers that Progress would be a good steward of the startup’s vision.
“For Chef, this acquisition is our next chapter, and Progress will help enhance our growth potential, support our Open Source vision, and provide broader opportunities for our customers, partners, employees and community,” Crist said in a statement.
Chef’s customer list is certainly impressive, and includes tech industry stalwarts like Facebook, IBM and SAP, as well as non-tech companies like Nordstrom, Alaska Airlines and Capital One.
The company was founded in 2008 and had raised $105 million, according to Crunchbase data. It hadn’t raised any funds since 2015, when it raised a $40 million Series E led by DFJ Growth. Other investors along the way included Battery Ventures, Ignition Partners and Scale Venture Partners.
The transaction is expected to close next month, pending normal regulatory approvals.
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A pandemic and recession won’t stop Atlassian’s SaaS push
No company is completely insulated from the macroeconomic fallout of COVID-19, but we are seeing some companies fare better than others, especially those providing ways to collaborate online. Count Atlassian in that camp, as it provides a suite of tools focused on working smarter in a digital context.
At a time when many employees are working from home, Atlassian’s product approach sounds like a recipe for a smash hit. But in its latest earnings report, the company detailed slowing growth, not the acceleration we might expect. Looking ahead, it’s predicting more of the same — at least for the short term.
Part of the reason for that — beyond some small-business customers, hit by hard times, moving to its new free tier introduced last March — is the pain associated with moving customers off of older license revenue to more predictable subscription revenue. The company has shown that it is willing to sacrifice short-term growth to accelerate that transition.
We sat down with Atlassian CRO Cameron Deatsch to talk about some of the challenges his company is facing as it navigates through these crazy times. Deatsch pointed out that in spite of the turbulence, and the push to subscriptions, Atlassian is well-positioned with plenty of cash on hand and the ability to make strategic acquisitions when needed, while continuing to expand the recurring-revenue slice of its revenue pie.
The COVID-19 effect
Deatsch told us that Atlassian could not fully escape the pandemic’s impact on business, especially in April and May when many companies felt it. His company saw the biggest impact from smaller businesses, which cut back, moved to a free tier, or in some cases closed their doors. There was no getting away from the market chop that SMBs took during the early stages of COVID, and he said it had an impact on Atlassian’s new customer numbers.
Image Credits: Atlassian
Still, the company believes it will recover from the slow down in new customers, especially as it begins to convert a percentage of its new, free-tier users to paid users down the road. For this quarter it only translated into around 3000 new customers, but Deatsch didn’t seem concerned. “The customer numbers were off, but the overall financials were pretty strong coming out of [fiscal] Q4 if you looked at it. But also the number of people who are trying our products now because of the free tier is way up. We saw a step change when we launched free,” he said.
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Harness makes first acquisition, snagging open-source CI company Drone.io
Harness has made a name for itself creating tools like continuous delivery (CD) for software engineers to give them the kind of power that has been traditionally reserved for companies with large engineering teams like Google, Facebook and Netflix. Today, the company announced it has acquired Drone.io, an open-source continuous integration (CI) company, marking the company’s first steps into open source, as well as its first acquisition.
The companies did not share the purchase price.
“Drone is a continuous integration software. It helps developers to continuously build, test and deploy their code. The project was started in 2012, and it was the first cloud-native, container-native continuous integration solution on the market, and we open sourced it,” company co-founder Brad Rydzewski told TechCrunch.
Drone delivers pipeline configuration information as code in a Docker container. Image: Drone.io
While Harness had previously lacked a CI tool to go with its continuous delivery tooling, founder and CEO Jyoti Bansal said this was less about filling in a hole than expanding the current platform.
“I would call it an expansion of our vision and where we were going. As you and I have talked in the past, the mission of Harness is to be a next-generation software delivery platform for everyone,” he said. He added that buying Drone had a lot of upside.”It’s all of those things — the size of the open-source community, the simplicity of the product — and it [made sense], for Harness and Drone to come together and bring this integrated CI/CD to the market.”
While this is Harness’ first foray into open source, Bansal says it’s just the starting point and they want to embrace open source as a company moving forward. “We are committed to getting more and more involved in open source and actually making even more parts of Harness, our original products, open source over time as well,” he said.
For Drone community members who might be concerned about the acquisition, Bansal said he was “100% committed” to continuing to support the open-source Drone product. In fact, Rydzewski said he wanted to team with Harness because he felt he could do so much more with them than he could have done continuing as a standalone company.
“Drone was a growing community, a growing project and a growing business. It really came down to I think the timing being right and wanting to partner with a company like Harness to build the future. Drone laid a lot of the groundwork, but it’s a matter of taking it to the next level,” he said.
Bansal says that Harness intends to also offer on the Harness platform a commercial version of Drone with some enterprise features, even while continuing to support the open source side of it.
Drone was founded in 2012. The only money it raised was $28,000 when it participated in the Alchemist Accelerator in 2013, according to Crunchbase data. The deal has closed and Rydzewski has joined the Harness team.
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Salesforce introduces several new developer tools, including serverless functions
Salesforce has a bunch of announcements coming out of the virtual TrailheaDX conference taking place later this week, starting today with some new developer tools. The goal of these tools is to give developers a more modern way of creating applications on top of the Salesforce platform.
Perhaps the most interesting of the three being announced today is Salesforce Functions, which enable developers to build serverless applications on top of Salesforce. With a serverless approach, the developer creates a series of functions that trigger an operation. The cloud provider then delivers the exact amount of infrastructure resources required to run that operation and nothing more.
Wade Wegner, SVP of product for Salesforce and Salesforce DX, says the Salesforce offering gives developers a lot of flexibility around development languages such as Node.js or Java, and cloud platforms such as AWS or Azure. “I can just write my code, deploy it and let Salesforce operate it for me,” he said.
Wegner explained that the new approach lets developers build serverless applications with data that lives in Salesforce, and then run it on elastic infrastructure. This gives them the benefits of vertical and horizontal scale without having to be responsible for managing all aspects of how their application will run on the cloud infrastructure.
In addition to Functions, the company is also announcing Code Builder, a web-based IDE based on Microsoft Visual Studio Code Spaces. “By leveraging Visual Studio Code Spaces we can bring the same capabilities to developers right in the browser,” Wegner said.
He adds that this enables them to be more productive with support for many languages and frameworks in a browser in the context of the environment that they’re doing their work, while giving them a consistent and familiar experience.
Finally, the company is announcing the DevOps Center, which is a place to manage the growing complexity of delivering applications built on top of Salesforce in a modern continuous way. “It is really meant to provide new ways with which teams of developers can collaborate around the work that they’re doing, and to manage the complexities of continuously delivering applications…,” he said.
As is typical for Salesforce, the company is announcing these tools today, but they will not be generally available for some time. Functions and Code Builders are both in pilot, while DevOps Center will be available as a developer preview later this year.
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HashiCorp to offer managed versions of its developer tools starting with Consul
HashiCorp is well known in the developer community for offering a slew of open-source tools to help build and manage modern applications. Today the company announced a new cloud platform and plans to eventually offer managed versions of those tools, starting with Consul, a tool for connecting and securing services across platforms.
HashiCorp CEO Dave McJannet says that the pandemic has accelerated demand for cloud infrastructure, and he sees a growing role for his company in helping to build cloud native applications. The company offers open-source and commercial versions of several popular tools, including Terraform, Consul, Vault and Packer, among others. These can run on premises or in the cloud, but McJannet says customers have been hankering for SaaS versions of these tools.
“Our customers have told us that it’s a huge challenge running a central shared service like Consul. It requires them to keep it up and running, and they have asked for something they can consume from us where we manage it for them,” McJannet told TechCrunch.
The company has been offering a managed version of Terraform for some time, but it has been quietly working on a cloud platform that could allow it to plug in each of the company’s products over time and offer managed services of all the products.
“What we are announcing today is what we call the HashiCorp Cloud Platform, and you can think of it as just a common chassis to allow us to run our products on any cloud. The first of those products that we’re making available is Consul on Amazon,” he said.
By offering the company’s products as a set of cloud services, it will lower the barrier to entry for customers who want to use their tooling, but don’t have the resources to run and manage on their own. That could potentially increase the company revenue over time. As McJannet pointed out, it’s a lot like what MongDB did with its managed Atlas database service, but for a wider set of products.
Last Fall, HashiCorp announced a $175 million investment on an impressive $5 billion valuation. It has 1,000 employees and is continuing to hire as demand for its product continues through the pandemic. McJannet was not discussing specific customer numbers, but said the customer count has doubled over the last year. As it builds out the new cloud services, and introduces more customers to its products, there’s a good chance that number will keep growing.
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New Harness product lets engineering teams monitor cloud spending in real time
One of the big advantages of using the cloud is ease of deployment. For engineers, being able to dial up infrastructure resources means being able to develop without delays, but it can also lead to big bills at the end of the month if you don’t know what you’re spending.
Harness wants to help with that, and today the startup released a product called Continuous Efficiency. It is designed to help engineering teams use cloud resources in a more cost-efficient manner, and do this in real time as they allocate resources.
Jyoti Bansal, co-founder and CEO at Harness, says that today most companies don’t know the extent of their cloud costs until the finance people get the bill at the end of the month. What’s more, the bill is entirely disconnected from the developers who are responsible for that cost. Finally, he says that at least 35% of that cost is waste, money they didn’t have to spend.
What Harness is hoping to do with this new product is give developers visibility into their spending with the goal that if they see how much waste they are generating they will dial back on usage.
“We are rethinking managing your cloud costs. From the perspective of developers, how do we give context sensitivity to developers so they get a full view of [what they are spending in the cloud],” he said.
Oftentimes, resources go unused or are over allocated, and giving visibility into this should let developers stay on budget, and in some cases save big bucks. To show how this works, the company says that one customer had a Kubernetes cluster configured with an annual cost of $1.6 million. After running the Continuous Efficiency product, it found that just 15% of the cluster compute resources were actually being used. After reconfiguring based on this data, they were able to save $1.3 million over the course of a year.
Image Credit: Harness
While Bansal says the product was in development long before the pandemic started, a tool like this at this particular moment in time is even more important as companies are looking for ways to cut costs.
Harness was founded in 2016 and has raised $80 million, according to Crunchbase data. Bansal formerly co-founded AppDynamics, a company that Cisco acquired in January 2017 for $3.7 billion.
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Pitch deck teardown: The making of Atlassian’s 2015 roadshow presentation
In 2015, Atlassian was preparing to go public, but it was not your typical company in so many ways. For starters, it was founded in Australia, it had two co-founder co-CEOs, and it offered collaboration tools centered on software development.
That meant that the company leaders really needed to work hard to help investors understand the true value proposition that it had to offer, and it made the roadshow deck production process even more critical than perhaps it normally would have been.
A major factor in its favor was that Atlassian didn’t just suddenly decide to go public. Founded in 2002, it waited until 2010 to accept outside investment. After 10 straight years of free cash flow, when it took its second tranche of investment in 2014, it selected T. Rowe Price, perhaps to prepare for working with institutional investors before it went public the next year.
We sat down with company president Jay Simons to discuss what it was like, and how his team produced the document that would help define them for investors and analysts.
Always thinking long term
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Docker expands relationship with Microsoft to ease developer experience across platforms
When Docker sold off its enterprise division to Mirantis last fall, that didn’t mark the end of the company. In fact, Docker still exists and has refocused as a cloud-native developer tools vendor. Today it announced an expanded partnership with Microsoft around simplifying running Docker containers in Azure.
As its new mission suggests, it involves tighter integration between Docker and a couple of Azure developer tools including Visual Studio Code and Azure Container Instances (ACI). According to Docker, it can take developers hours or even days to set up their containerized environment across the two sets of tools.
The idea of the integration is to make it easier, faster and more efficient to include Docker containers when developing applications with the Microsoft tool set. Docker CEO Scott Johnston says it’s a matter of giving developers a better experience.
“Extending our strategic relationship with Microsoft will further reduce the complexity of building, sharing and running cloud-native, microservices-based applications for developers. Docker and VS Code are two of the most beloved developer tools and we are proud to bring them together to deliver a better experience for developers building container-based apps for Azure Container Instances,” Johnston said in a statement.
Among the features they are announcing is the ability to log into Azure directly from the Docker command line interface, a big simplification that reduces going back and forth between the two sets of tools. What’s more, developers can set up a Microsoft ACI environment complete with a set of configuration defaults. Developers will also be able to switch easily between their local desktop instance and the cloud to run applications.
These and other integrations are designed to make it easier for Azure and Docker common users to work in in the Microsoft cloud service without having to jump through a lot of extra hoops to do it.
It’s worth noting that these integrations are starting in Beta, but the company promises they should be released some time in the second half of this year.
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Env0 announces $3.3M seed to bring more control to Infrastructure as Code
Env0, a startup that wants to help companies bring some order to delivery of Infrastructure as Code, announced a $3.3 million seed investment today and the release of the Beta of the company’s first product.
Boldstart Ventures and Grove Ventures co-led the round with participation from several angel investors including Guy Podjarny of Snyk.
Company co-founder and CEO Ohad Maislish says the ability of developers to deliver code quickly is a blessing and a curse, and his company wants to give IT some control over how and when code gets committed.
“The challenge companies have is how to balance between self-service and oversight of cloud resources in a cloud native kind of way, and to balance this with visibility, predictability, and most importantly, governance around cloud security and costs,” Maislish said.
The product lets companies define when it’s OK for developers to deliver code and how much they can spend instead of letting them deliver anything, at any time, at any cost. You do this by giving overall control of the process to an administrator, who can then define templates and projects. The templates define which repositories and products you can use for a given cloud vendor and the projects correlate to the users allowed to access those templates.
Image Credit: Env0
Ed Sim, founder and managing partner at Boldstart says the startup has been able to find a good balance between governance and the need for speed that today’s developers require in a continuous delivery environment. “Env0 is the first SaaS solution that meets all of those needs by offering self-service cloud environments with centralized governance,” Sim said in a statement.
It’s not easy launching an early-stage company in the middle of the current economic situation, but Maislish believes his company is in a decent position as it provides a way to control self-service development, something that is even more important when your developers are working from home outside of the purview of IT and security.
The company launched 18 months ago and has been in private beta for some time. Today marks the launch of the public beta. It currently has 10 employees.
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