Goldman Sachs is investing $20 million in $1.1 billion startup GitLab because the bank's engineers loved it so much: 'They were so happy as a customer'
- Goldman Sachs has invested $20 million into the DevOps platform GitLab, adding to a Series D funding round that valued the startup at $1.1 billion.
- While Goldman Sachs has made strategic tech investments for around two decades, GitLab was unique because the investment was driven by the bank's own engineering team.
- Goldman Sachs's tech team started using GitLab on its own projects at the beginning of 2018.
- GitLab is seen as a leading upstart rival to GitHub, the code-sharing company that Microsoft bought for $7.5 billion this year.
Goldman Sachs is investing $20 million into GitLab, just months after the software startup announced a mega Series D at a $1.1 billion valuation.
Goldman's add-on investment brings GitLab's total Series D funding up to $110 million. The round was led by Iconiq Capital, Mark Zuckerberg's personal money managing firm. Alphabet's GV, which led its last funding round in 2017, also participated.
"I think this investment is really special because it's [Goldman's] actual engineering team that said 'we want to invest in this,'" Sid Sijbrandij, CEO of GitLab, told Business Insider. "They were so happy as a customer that they were like, yes, this is the future."
Sijbrandij said the funding will be used to ensure GitLab is "best in class" in each of the product categories it competes in - its rivals include GitHub, a Microsoft subsidiary, as well as Atlassian BitBucket. To achieve its goals, Sijbrandij said, GitLab will double its headcount over the next year, after already doubling its staff in 2018.
Read more: Investors used to balk at startups for software developers - but after Microsoft bought GitHub for $7.5 billion, they're all in
The funding came out of Goldman's Principal Strategic Investments group, a division that focuses on investing the bank's own money into technology companies that are strategically useful for the banking industry.
When it first launched in the late 1990s, the group focused on market infrastructure and trading technologies, though the unit has since expanded to include areas like fintech, security and enterprise investments, among others.
One of the most recent of its prolific tech investments is Symphony, a secure instant messaging system built for financial institutions, which was designed to challenge the dominance of the Bloomberg Terminal.
Goldman will advise GitLab on product
Like its competitor GitHub, which sold to Microsoft for $7.5 billion in June, GitLab is a software developer platform built around an open-source technology called Git. It allows large groups of programmers to all work on the same piece of software without getting in one another's way, and is an important part of how software gets made today.
Goldman started using GitLab internally in early 2018. What started out as tool used on small project quickly got pushed out to the entire engineering organization at the bank.
Now the two companies enjoy a close relationship: Goldman advises GitLab on how to shape its tools for the compliance needs of financial institutions; and Goldman gets new tools built by the company to suit its needs.
"They will be very active in guiding us on how to make a better product that is as compliant as possible, and that helps with governance and best practices," Sijbranij said.
The two teams have already worked together on new tools, such as a security feature which requires multiple administrators to approve code before it is deployed. The two have also worked on security protocols that actively scans code for flaws as it is written.
While many of these tools have already existed out in the world in some form or another, Sijbranij said, GitLab streamlines them all into one integrated platform.
"That's the problem we're solving - we're not inventing anything that hasn't been done before, but making sure all of those 30 tools are in one interface," Sijbrandij said.