Build apps faster, or why we invested in Nhost!

We are big believers in and supporters of open-source software. Accordingly, we are excited to lead the $3m Seed round in Nhost, a startup based in Stockholm and Berlin, and join the amazing founders Johan and Nuno on their exciting journey to tackle the incumbent competitor Firebase.

Johan and Nuno, founders of Nhost.

Since starting to work in venture capital, I have not been programming as much as I would have liked to. Accordingly, I was more than excited to try out a platform recommended to me called Nhost. While I love writing code, I am less passionate about setting up and taking care of infrastructure. I was very positively surprised by the ease of use of Nhost — within minutes I had a PostgreSQL database with a GraphQL API and authentication set up.

Without much experience in frontend development, I quickly built a React app following the Nhost documentation. My pet project was to build a simple web app to search through a list of open — source projects that I have pulled via the Github API. I used Netlify to set my project live.

I basically only needed to use three tools for this project: Nhost, Netlify, and GitHub (to be fair, I additionally wrote a little Python script to pull data). I could not be more excited about the fact that only a couple of months later Nauta Capital invested in Nhost together with the GitHub founders Tom Preston-Werner and Scott Chacon, as well as the founders of Netlify Christian Bach and Mathias Biilmann (amongst other strong angel investors).

About Nhost

Nhost is a Stockholm and Berlin-based tech company that provides developers with all the necessary infrastructure to start building their web or mobile applications.

Building and maintaining a backend for an application is time-consuming and requires expertise. Developers need to ( i ) set up, manage and configure their cloud infrastructure, (ii) program the application layer (setting up user management, APIs, storage, decide on tech stack), and (iii) maintain their application (security, performance, scalability, updates).

However, there are only an estimated 27m software developers worldwide (3.3% of the overall population) leading to 500k+ unfilled software engineering positions in the US alone and ever-increasing salaries in the field. At the same time, 80% of a web application consists of boilerplate code like Authentication, User Management, Messaging, or Notifications. Building these functionalities again and again reduces the time of developers to focus on the part of their software that truly differentiates them from their competitors.

Additionally, while managing the backend requires time and effort, most apps are planned and designed starting from a user perspective. The frontend is the first and most important touchpoint and will in many cases guide application development. In this situation, the backend becomes a commodity and the fronted the main differentiator.

Nhost automatically sets up a backend with a relational database, a GraphQL API, authentication, and storage (permissions, user management). For this, they use battle-tested open-source technologies like PostgreSQL as a relational database, Hasura to manage the API layer, and Minio together with a set of powerful permission rules as storage. Additionally, Nhost added authentication to complete the package and published its core technology as the open-source project hasura-backend-plus.

The entire operations and infrastructure are automated and handled by the Nhost platform. In this way, frontend developers are enabled to immediately build their web applications using their favorite technology like React or Next.js.

Nhost quick start guide to building an app with React, GraphQL, and authentication.

There are multiple reasons to love Nhost

As an investor, you always get excited about extraordinary founders. In the case of Nhost, the founders Johan and Nuno were definitely the main pillars of our investment thesis.

Johan is a very entrepreneurial person who built his first company while in high school. He studied Computer Science at Blekinge Institute of Technology with a focus on IT security. Instead of taking a highly paid IT job, he decided to help his father scale the family business. Working on several web applications on the side, he started building Nhost. He is very passionate about the company’s solution and has a clear vision.

His co-founder Nuno is a strong technical leader. After his BSc in Computer Engineering at the Instituto Superior Técnico, he moved to Berlin to gather experience in several fast-growing companies like Delivery Hero and Marley Spoon. He has extensive experience in infrastructure companies like CodeShip and Cloudbees and knows what it takes to build a commercial open-source company.

Find below an incomplete list of things that have excited us about Nhost :

1. Early Traction. Without any marketing, already 1400+ users have signed up to Nhost by the end of 2020. Over 700 projects have been created on their platform up to date.
2. Open-source. We expect open-source products to become dominant in the software space. We feel that there is growing unrest among developers relying on proprietary products like Google Firebase and believe that an open-source player can disrupt this market.
3. Technology. The company combines battle-tested technologies like PostgreSQL with emerging development paradigms like GraphQL — exactly the combination application developers are looking for.
4. User-Centric Design. Most of all apps are planned and designed starting from a user perspective. The frontend is the first and most important touchpoint and will in many cases guide application development. In this situation, the backend may become a commodity and the fronted the main differentiator. A backend-as-a-service (BaaS) is a natural answer to this.
5. Timing. Nhost finds itself in the middle of a few trends converging. There are a lot of frontend developers and the numbers grow by the day, for example, due to disruptions in education like developer boot camps. At the same time, frontend frameworks like React are becoming more and more powerful and allow things to be done on the client-side that used to be classical backend tasks, finally allowing for more standardized backend (giving rise to BaaS players) and frontend (Jamstack platforms like Netlify and Vercel) services. Additionally, developers grow suspicious of incumbent frameworks like Firebase, fueled by Google closing a record number of legacy products and unannounced pricing changes in the platform. Developers, therefore, look for solutions with lower vendor lock-in, e.g. open-source, and prioritize companies that they can trust based on their values. Finally, the new API paradigm of GraphQL and its management with powerful (open-source) platforms like Hasura or Apollo is creating productivity that has formerly been unheard of.

Having experienced first-hand how simple it can be to get an application live using Nhost, we are very much looking forward to seeing what the company has planned for us in the future.

Team Nhost, welcome to the Nauta Family, we are excited to back you on this great journey!

🤓 Learn more about Nhost on their: https://nhost.io/
👩‍💻 Work with a great & experienced team: link to career page
🎟️ Sign-up and start building: https://console.nhost.io/register

Originally published at https://nautacapital.com on April 23, 2021.