- GitLab has raised $100 million in a round led by Iconiq Capital, with the deal valuing the startup at $1.1 billion.
- GitLab is one of the chief competitors to GitHub, the startup Microsoft is buying for $7.5 billion.
- Both companies offer tools to help huge teams of programmers work on the same piece of software. But GitLab has found success by focusing on business customers.
- This huge round is another sign of how the Microsoft/GitHub deal kicked off a Silicon Valley gold rush around programmer-focused startups.
When Microsoft announced its intention to buy GitHub for $7.5 billion earlier this year, it started something of a gold rush in Silicon Valley, as investors looked to get in on the booming market for software developer-focused startups.
The latest evidence: GitLab, one of GitHub’s chief competitors and a hot startup in its own right, announced on Wednesday a mega-round of funding to the tune of $100 million, giving it a valuation of $1.1 billion. The round was led by Iconiq Ventures – the venture capital firm best known for managing Mark Zuckerberg’s money.
The company’s most recent funding round before this one was led in 2017 by GV, the venture capital arm of Google’s parent company, Alphabet. Going forward, the company plans to invest the cash in product development, it said in a press release. Notably, GitLab has no office space and every employee works remotely from cities around the globe.
GitLab, like GitHub, is built around an open-source technology called Git, which allows tremendous groups of programmers to all work on the same piece of software without stepping on each others’ code. GitLab, and tools like it, have become foundational to the way that software gets made in the modern era.
That’s why Microsoft shelled out so much for GitHub: Microsoft’s cloud business relies on its ability to continually attract and retain developers to its platform, and GitHub is the place where so many programmers get their work done.
For its part, GitLab has a slightly different approach, selling primarily to companies small and large. Unlike its rivals, GitLab’s core product is a version that can be installed on a company’s own servers. That, in turn, gives companies greater peace of mind about where and how their important programming code is kept.
GitLab CEO Sid Sijbrandij recently told Business Insider that over 100,000 code repositories were moved to his platform from GitHub following the news of the Microsoft acquisition. He said that the deal served as a “wake-up call” to programmers, giving them the impetus to look at competing platforms like GitLab, which he said offers a superior set of tools.
In the bigger picture, GitLab is an increasingly major player in the world of DevOps, an IT industry term for the concept of helping developers deliver more code, more quickly. With the GitHub acquisition, Microsoft attracted a lot of attention to the space, with companies like PagerDuty, Puppet Labs, CloudBees, and now GitLab taking in sizable rounds of funding in the aftermath.
The larger trend here is that developers are increasingly important to just about every business in just about every industry, and so investors are seeing a lot of upside in startups and companies that cater to those programmers. Where before, companies would have to acquire new technology through an often-byzantine buying process, now they can just log on to a website and download a tool like GitLab to get started.
“All of the specialized skill sets in the enterprise are being disrupted by cloud software and an increasing realization that the people using the product should be the ones to decide what to use,” Ethan Kurzweil, a partner at Bessemer Venture Partners and an active investor in the DevOps space, recently told Business Insider.