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19 open source software-related startups that will blow up in 2019, according to VCs
19 open source software-related startups that will blow up in 2019, according to VCs
Rosalie ChanMar 1, 2019, 19:30 IST
DEV cofounders Peter Frank, Jess Lee, and Ben HalpernDEV
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We asked several venture capital investors to tell us which commercial open source startups will boom in 2019.
These startups make some of their software available as open source, which means that anyone can use, download or modify the code for free.
Open source software is quickly becoming popular among developers and companies, so we asked these investors to name the startups they're excited about, from seed startups to ones that may make an exit soon.
Last year, open source-centric software companies were at the center of some major deals: Salesforce acquired Mulesoft, Microsoft acquired GitHub, VMware acquired Heptio, IBM announced it would acquire Red Hat, Cloudera and Hortonworks merged, and Elastic went public.
These companies often make the core of their software available as open source, which means that people can download and use the code however they want - making money by offering additional features or better technical support to business users.
While many in Silicon Valley were skeptical of this business model for a long time, investors are now betting that the open source business model will help these kinds of companies spread like wildfire and find an audience. Last year's mega-deals have shone a light on just how pervasive open source can be in the business.
Now, as we wait for the $34 billion Red Hat/IBM deal to close, we asked venture venture capital investors to name the open source software startups they believe are going to boom in 2019. Those investors named startups, both within and outside their portfolios, that they were particularly excited about for the rest of 2019.
What follows is a compelling list of commercial open source software startups set for success in 2019. They range from fledgling companies with hardly any funding, to well-established companies that could very well be heading for a huge exit.
The funding information is according to official announcements, as well as Crunchbase and Pitchbook, keepers of such records.
VCs: Eric Anderson, principal of Scale Venture Partners, and Aaron Jacobson, partner at New Enterprise Associates
Relationship: Jacobson is an investor.
Total raised: $497.36 million
What it does:Databricks offers a data analytics platform with machine learning abilities, making it easier for data scientists to handle large amounts of information. Databricks just closed $250 mililon in funding in February, and its software has been used to help drug companies create better medicine. Anderson calls Databricks one of "the next big OSS (open source software) exits."
Why it's hot in 2019: "They are considered experts and sponsors of extremely popular open source projects," Anderson said. "Users of open source are making large, complex, mission-critical deployments that are difficult to manage, which leads users to want to outsource to expert. In some cases customers are spending 8 figures with these companies to run these complex systems."
Sonatype
Startup: Sonatype
VC: Daniel Levine, partner at Accel
Relationship: Investor
Total raised: $157.17 million
What it does:Sonatype develops open source security and automation products to help businesses reduce security risks and become more productive.
Why it's hot in 2019: "Open source continues to proliferate. Sonatype helps take open source into the enterprise, allowing to enterprises to govern it with things like security policies. Enterprise adoption of open source is accelerating and so will Sonatype."
Hazelcast
Startup: Hazelcast
VC: Salil Deshpande, partner at Bain Capital Ventures
Relationship: Investor and board member
Total raised: $16.92 million
What it does: Hazelcast offers an in-memory database, which only uses a system's main memory to store data, rather than a disk. This allows systems to obtain and analyze data more quickly.
Why it's hot in 2019: "'In-memory computing' or 'DRAM databases' are riding two major waves: the rise of unstructured data, and the need for databases to hold more and more data in DRAM rather than disk. DRAM is 10,000 times faster than disk in theory, and 100 times faster in practice."
Solo.io
Startup: Solo.io
VC: Eric Anderson, principal of Scale Venture Partners
Relationship: None
Total raised: $13.85 million
What it does: Solo.io develops tools to help companies adopt cloud technologies and "glue" together traditional and cloud apps.
Why it's hot in 2019: "[The] founder is [an] expert in distributed systems and Kubernetes ecosystem and has attracted a great team."
Gatsby
Startup: Gatsby
VC: Daniel Levine, partner at Accel
Relationship: None
Total raised: $3.8 million
What it does: Gatsby makes tools that make it easy for people to quickly build websites without having to install software.
Why it's hot in 2019: "More and more devs want to use tools like these for performance, cost, portability, et cetera."
SiFive
Startup: SiFive
VC: Joseph Jacks, founder and general partner of OSS Capital
Relationship: Supporter
Total raised: $89.59 million
What it does: SiFive creates open-source chip platforms. This company is founded by the creators of RISC-V, an open source computer architecture that anyone can use for free to design, manufacture and sell chips and software.
Why it's hot in 2019: "Explosive growth. Doubling yearly."
Mattermost
Startup: Mattermost
VC: Eric Anderson, principal of Scale Venture Partners, and Joseph Jacks, founder and general partner of OSS Capital
Relationship: Jacks is an investor.
Total raised: $20.12 million
What it does: Mattermost is an open source chat app for organizations. People can securely send messages via the web, phone or their computers. Companies like Uber have built their internal chat apps off of Mattermost, moving away from closed-sourced rivals like Slack.
Why it's hot in 2019: "This is an explosive growth company that in one way is a commercial OSS alternative to Slack but really a modern DevOps optimized communications and messaging chat platform for the enterprise that can run anywhere," Jacks said.
"Developers love Slack, but some companies don't. They mostly don't love that data is not in their control. Mattermost is an open-core alternative that developers can extend and run on-premises or wherever they want," Anderson said.
Redis Labs
Startup: Redis Labs
VC: Salil Deshpande, partner at Bain Capital Ventures
Why it's hot in 2019: "The importance of databases capable of handling non-relational data created a new category and have led to the IPOs of MongoDB and Elastic. We believe Redis Labs is one of multiple winners in this category."
Zeit
Startup: Zeit
VC: Daniel Levine, partner at Accel
Relationship: Investor
Total raised: $20.1 million
What it does: Zeit develops an open source business intelligence and analytics platform for businesses to observe trends and analyze their data. Zeit also offers services like hosting and support.
Why it's hot in 2019: "It's never been cheaper, easier, or more performant, to deploy web apps."
DataStax
Startup: DataStax
VC: Eric Anderson, principal of Scale Venture Partners
Relationship: Investor
Total raised: $190.79 million
What it does:DataStax provides an open source database management platform for cloud applications. Anderson calls DataStax one of "the next big OSS (open source software) exits."
Why it's hot in 2019: "They are considered experts and sponsors of extremely popular open source projects. Users of open source are making large, complex, mission-critical deployments that are difficult to manage, which leads users to want to outsource to expert. In some cases customers are spending 8 figures with these companies to run these complex systems."
Anaconda
Startup: Anaconda
VC: Steve Herrod, managing director of General Catalyst
Relationship: Investor
Total raised: $53 million
What it does: Anaconda provides analytics software that customers can use to identify patterns in their data.
Why it's hot in 2019: "Nothing is hotter these days than machine learning and artificial intelligence. And Python has become the top language for engineers working in these fields. Austin-based Anaconda provides and supports the broad collection of software packages used in this booming data science and machine learning world, and is growing quite rapidly."
SignalWire
Startup: SignalWire
VC: Joseph Jacks, founder and general partner of OSS Capital
Relationship: Supporter
Total raised: $3 million
What it does: SignalWire offers a communications platform that helps developers build apps that can make phone calls, or send text and video messages.
Why it's hot in 2019: "Think of it as a commercial OSS Twilio but really focused on building a revolutionary telecommunications and dial-tone platform for voice and video streaming over the internet ... Extremely exciting and hidden gem."
Confluent
Startup: Confluent
VC: Daniel Levine, partner at Accel, and Eric Anderson, principal of Scale Venture Partners
Relationship: None
Total raised: $205.9 million
What it does:Confluent, founded by ex-LinkedIn employees, offers an event streaming platform that developers can use to access data in real time. Confluent just closed $125 million in January and introduced a new software license last December. Anderson calls Confluent one of "the next big OSS (open source software) exits."
Why it's hot in 2019: "Confluent is already going big. Confluent is the company from the creators of Kafka. Not everyone in the world will power their whole data layer with Kafka, but a lot of companies will power at least some of it. In 2019 it'll become obvious just how popular Kafka is for folks who buy into it's way of the world. Confluent will be a huge beneficiary of that and continue to scale extremely quickly," Levine said.
DEV
Startup: DEV
VC: Joseph Jacks, founder and general partner of OSS Capital
Relationship: Investor
Total raised: $950,000
What it does: DEV is an online social community for developers, where they can post questions, share ideas and write blog posts.
Why it's hot in 2019: "Think of them as Reddit for software engineers. Phenomenal growth, millions of monthly unique, high engagement and only a year into their journey! This is the place where the next generation of software engineers will go to learn, collaborate and grow."
Corelight
Startup: Corelight
VC: Daniel Levine, partner at Accel
Relationship: Investor
Total raised: $34.1 million
What it does: Corelight is based on an open source framework originally called Bro, now now known as Zeek, which helps analyze security data. Corelight's software allows users to analyze network traffic and prevent cyberattacks.
Why it's hot in 2019: "The company behind the open source Zeek Network Security Monitor. The project has been widely deployed for years in many of the most important and sophisticated companies in the world. Corelight makes it easier to use Zeek with a higher-level product abstraction. There's been pent up demand for years, and now there's finally a company to help."
Tidelift
Startup: Tidelift
VC: Steve Herrod, managing director of General Catalyst
Relationship: Investor
Total raised: $40 million
What it does: Tidelift, founded by ex-Red Hat employees, started an open source software marketplace where users can buy and sell services for maintaining and securing open source projects. Tidelift just closed $25 million in funding in January.
Why it's hot in 2019: "Open source is taking over every category of software, but there are still challenges with the long tail of offerings - those without large commercial entities behind them. Most companies really need some commercial entity behind the open software that they consume to provide support, security fixes, and other enhancements. Tidelift becomes that commercial entity by connecting key contributors towards the open source with the companies that need their help. The end result will be even further adoption of newer open source packages as well as the ability for open source contributors to make a strong living working on the code that they love."
Pachyderm
Startup: Pachyderm
VC: Eric Anderson, principal of Scale Venture Partners
Relationship: None
Total raised: $12.12 million
What it does: Pachyderm provides a data analytics platform that allows users to store and analyze data using containers — a software package that wraps up the code and everything needed to run it so it can be accessed from anywhere.
Why it's hot in 2019: "Pachyderm is an alternative that uses Kubernetes, the new standard, for the distributed computing logic and containers to create a flexible modern data engineering toolchain."
Sentry
Startup: Sentry
VC: Daniel Levine, partner at Accel
Relationship: Investor
Total raised: $27 million
What it does: Sentry provides a crash reporting tool so that developers can quickly fix major problems as they occur. The tool also includes data that helps developers prioritize those crash-causing bugs and see which problems are causing the most harm.
Why it's hot in 2019: "Sentry is the dominant tool in the application error logging world in large part because they are open source. 2019 is the year they take their open source approach into adjacent areas of the application telemetry world and I think they'll have similar success, but in a much larger market. They'll begin to disrupt players like New Relic, AppDynamics, Dynatrace, etc."
Tigera
Startup: Tigera
VC: Aaron Jacobson, partner at New Enterprise Associates
Relationship: Investor and board member
Total raised: $53 million
What it does: Tigera develops software to help applications stay securely connected across the cloud and the data center.
Why it's hot in 2019: "Kubernetes has become the dominant platform for running microservice-based applications and Tigera provides the network security and continuous compliance required to protect them."
