Q3 2016 ‘Dev-Native’ Funding Roundup
In Q3 2016, funding for dev-native(1) companies was down 20% over the same period last year. The decline mirrored the broader venture market which was down nearly 29% YoY, according to the NVCA. After a record-breaking first half of 2016, the Q3 decline implies that financings for developer-oriented companies are now at nearly an identical level to 2015 through three-quarters of the year.
In Q3, $617 million was invested into 36 dev-native companies. Of that total, nearly 50% went into ‘Developer Productivity’ companies, with two startups (Unity and C3 IoT) commanding over 40% of total dollars invested in the entire dev-native category. Funding for ‘Services-as-Code’ companies lagged however, with the notable funding being Auth0’s $15 million Series B.
Highlights from Q3 ’16 include:
- C3 IoT, a full-stack Internet of Things application platform, raising a $70 million Series D
- Unity Technologies, developer of Unity, one of the most popular licensed game engines, announcing a giant $181 million Series C
- Pantheon, a website management platform built for Drupal and WordPress hosting, raising a $29 million Series C
- HashiCorp, a leader in open source DevOps infrastructure, announcing its $24 million Series B
- GitLab, the open source Git repository management platform, raising a $20 million Series B
- Attic Labs, the creators of NomsDB, a versioned, forkable, synchronizing database for the Web, announcing their $8 million Series A
The news and data coming out of Q3 speaks to a broader trend around providing tooling to enable devs to create powerful applications across new categories and platforms including VR/AR (e.g. Unity) and IoT (C3 IoT). As the first generation of dev-native companies like Twilio mature and go public, a new cohort is emerging to take advantage of opportunities associated with more nascent innovation cycles. We expect this trend to accelerate in the coming quarters.
(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 there four distinct taxonomies:
- Developer Productivity — 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.
- Software Lifecycle Management — 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 — Emulated, programmable compute, storage and network resources responsible for executing logic and running and scaling applications. Examples include virtualized infrastructure, configuration management, databases, operating systems, container engines, cluster management and orchestration platforms and security.
- Services-as-Code — 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), banking (Plaid) and many others.