CloudBees Collects $10M Series B For Cloud Application ServiceJuly 25, 2011
by Scott Denne
With $10.5 million in Series B funding, CloudBees Inc. is one of several start-ups racing to be at the heart of web applications in the cloud.
The Boston-based company, which offers a service that enables software developers to build and run Java applications in a cloud, launched in January and faces competition from companies building cloud platforms for Java and other programming languages.
New investor Lightspeed Venture Partners led the round, which included participation from Series A investor Matrix Partners. The round gives the company a valuation that’s around $30 million, said its chief executive and founder, Sacha Labourey, though he wouldn’t be more specific.
Several other players in this market—such as venture-backed Engine Yard Inc. and Heroku Inc., which was bought late last year by Salesforce.com Inc. for $212 million—have performed well among start-ups, said Matrix Partners’ David Skok, but are built around other programming languages that aren’t nearly as popular as Java in the enterprise, which is the larger market, he said.
But to get Java applications to work well in the cloud “you need to have deep Java application server experience,” which CloudBees’ team has through its work on JBoss, the most widely used application server, Skok said. Several members of its management and engineering team come from JBoss, a division of Red Hat Inc., including Labourey, who was JBoss’ chief technology officer.
RedHat’s OpenShift and VMware Inc.‘s Cloud Foundry are the company’s closest competitors. But those have yet to launch, and CloudBees has no “constraints in how fast we innovate,” where those competitors must have more measured growth to guarantee they don’t eat into profits from other products, Labourey said.
Unlike a lot of other platform-as-a-service companies, CloudBees hides IT operational concepts, like servers and storage, so developers don’t need to consider them when building applications.
The proceeds from the round will be used to “buy time,” Labourey said. “We know this market is going to be huge, but we can’t predict when that will happen,” he said. “That money is really about lasting long to be able to make the right decisions.”
John Vrionis, a managing director at Lightspeed Venture Partners, has joined the company’s board as a result of the round. CloudBees raised a $4 million Series A round last fall, which was led by Matrix Partners.