Q1 2016 ‘Dev-Native’ Funding Roundup
Despite looming fears about a slowdown in investment activity and a rationalization of prices, Q1 2016 was the highest first quarter on recent record for funding of dev-native(1) companies.
Venture investors poured in just over $554 million across 28 companies, representing 43% growth over Q1 of last year and 32% growth over the previous quarter. The increased funding activity is representative of an inflection point in the current innovation cycle being driven by the adoption of cloud and DevOps/continuous delivery practices as well as the rise of a new decentralized application architecture. The data is proof-positive that it’s as good a time as ever to be a startup that facilitates migration to the cloud, accelerates software release cycles and/or enables adoption of cloud-native application architectures.
Some of the most notable financings include:
- Datadog, a leader in cloud-based infrastructure monitoring, raising a $94.5 million Series D
- Mesosphere, the company behind the Apache Mesos cluster manager, raising a $73.5 million Series C
- OutSystems, an application development and rapid delivery platform, raising a $55 million Series C
- Asana, an enterprise collaboration platform, raising a $50 million Series C
- JFrog, a binary repository management system, raising a $50 million Series C
- Checkr, an API for automating background checks, raising a $40 million series B
- Cockroach Labs, an open source distributed, relational database, raising a $20 million Series A-1
- Rainforest, a provider of QA-as-a-Service, raising $12 million Series A
With respect to the types of companies that attracted VC interest, Q1 was particularly kind to code lifecycle management (‘CLM’) companies which saw 12 financings and garnered nearly 40% of total invested capital in the dev-native category. Meanwhile developer productivity (‘DP’) funding saw a nice rebound from Q4 2015 (less than $5 million invested) thanks in large part to big rounds from JFrog and Asana.
It’s important to note that funding announcements are a lagging indicator. Given that, it will be interesting to see if Q2 witnesses a similar spike as it did in 2014 and 2015 or if the trepidation that filled the ecosystem in Q1 will be reflected in the data. Regardless, one thing is clear: enterprise appetite for tools and services that enable devs to write better code faster and deliver that code into customers’ hands shows no signs of abating.
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1) Dev-native refers to a company whose a) primary product or service offering is delivered in the form of code or in the form of software that facilitates the creation of code and/or b) who targets the developer as an end-market or as a channel into the enterprise. Within the dev-native stack we’ve there four distinct taxonomies:
Developer Productivity (DP) — Tools that help developers write and collaborate around code. Examples include language frameworks and libraries, development environments, source code management, collaboration and project management platforms.
Code Lifecycle Management (CLM) — Tools that test, deploy, manage and monitor code across dev, test/QA and production environments. Examples include build automation, continuous integration and delivery platforms, test and QA software, application performance monitoring, and infrastructure monitoring.
Infrastructure-as-Code (IaC) — Emulated, programmable compute, storage and network resources responsible for executing logic and running and scaling applications. Examples include virtualized infrastructure, databases, operating systems, container engines, cluster management, configuration management,
Services-as-Code (SaC) — Products and services that are instantiated in code and delivered via APIs and SDKs. Examples include communications (Twilio), payments (Stripe), business intelligence (Segment), commerce (Shopify), mapping (Mapbox), analytics (Keen.io) and many others.
