VCs just invested $8 million into this startup that gave away its software for free because they noticed how much people loved it
- Open source business intelligence startup Metabase announced Tuesday that it closed $8 million in a series A funding led by New Enterprise Associates.
- NEA has previously invested in open source companies like MongoDB, Elastic, Nginx, and Databricks, so when it tracked how fast Metabase was growing, it reached out to the project's founder Sameer Al-Sakran.
- With the funding, Metabase will work on an enterprise edition with features for large companies.
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The VC firm New Enterprise Associates has previously invested in buzzy open source software companies like MongoDB, Elastic, Nginx, and Databricks. So when NEA principal Julia Schottenstein saw how fast an open source business intelligence software project called Metabase was growing, she knew what NEA's next investment had to be.
Believing Metabase could potentially grow into a large company, she emailed Metabase founder and CEO Sameer Al-Sakran several times, with no reply. When he finally did reply, it was only a matter of weeks before NEA officially decided to invest.
On Tuesday, Metabase announced it raised $8 million in series A funding led by NEA, and it also launched an enterprise edition of its product with features aimed at large companies.
"I think most founders have roller coaster experiences," Al-Sakran told Business Insider. "We always have faith that the product will continue. Thankfully we have had a very vibrant community. People have donated their time. We have been able to lean on our community and get support from us."
Metabase's code is available as open source, meaning anyone can use, download or modify it for free. That means Metabase can be put into as many people's hands as possible -- all without a sales or marketing team. Already, the Metabase's free software has been downloaded over 12 million times, and it's used by over 14,000 companies.
"We're not necessarily a household name, but within certain engineering circles we're well known," Al-Sakran said. "We've always had a very high bar for user experience."
"Screaming" enthusiasm
Since Metabase started in 2014, Al-Sakran has focused on the free, open source project. Metabase didn't start making money until last summer, when it started selling early versions of its enterprise software.
And it was this community that helped Metabase obtain funding. Its lead investor NEA had been tracking fast-growing open source projects, and it saw how quickly the Metabase community has grown.
"With Metabase, it was extraordinary how we were able to hear from users how they loved the product," Schottenstein told Business Insider. "That enthusiasm from the users was just screaming."
Schottenstein says her firm believes the open source model can be financially successful. NEA portfolio companies Elastic and MongoDB have since gone public, and Nginx will be acquired by F5 Networks. Still, not all investors understand the logic of giving away software for free.
Read more: Here's why investors are throwing money at startups that give away their software for free
"Open source isn't for everyone. You have to have a stomach for the category," Schottenstein said. "There's a period of time where you let your community soak and get excited about what you're building."
The Metabase community
As Al-Sakran builds out Metabase's enterprise product, he hopes to make it easy for any employee to ask questions about their organization's data, instead of only letting data analysts and engineers benefit from company information. He says that in his last four jobs, he essentially had to build the exact same product: a business intelligence tool.
He felt that instead of companies having to build the same thing from the ground up, there should be an analytics product that any company can use. That's when he decided to start developing exactly that - and then he put the code online and gave it away for free.
"My team had built something like it over and over again," Al-Sakran said. "It felt like something everyone should use as a default."
Although other companies have their own versions of business intelligence software, Al-Sakran says what made Metabase grow so fast is that it focused on "being the simplest possible experience for the end users."
"That's what we'll continue to push on going forward," Al-Sakran said. "For the most part we listen to our community. They are very supportive and very vocal and very clear about what they need.
The community also sets Metabase apart, Al-Sakran says. Metabase is used in over 100 countries, and last fall, Metabase started accepting translations for its product. Already, it has been deployed in 10 languages in three months. Al-Sakran points to how over 200 people volunteered their time to translate the product.
"The enthusiasm people applied to translating to their own language was incredible," Al-Sakran said. "Folks sat there for free and did it themselves to have the experience in their native language. That was the most inspiring moment of all. They care about it, they use it, and they want to have something that's part of their world."