- Investors believe that many commercial open source software startups will emerge as power-players amid the coronavirus pandemic and its aftermath, even as other sectors take a big hit.
- These kinds of startups have a few advantages, investors say: The work lends itself well to distributed teams doing their jobs remotely, and open source software is attractive to customers who are otherwise slashing their IT budgets.
- Here are 31 commercial open-source software startups poised for success in 2020, according to VCs.
- Visit Business Insider’s homepage for more stories.
The economic downturn sparked by the coronavirus pandemic may be hitting many industries hard, but investors say that it may turn out to be a positive opportunity for commercial open source startups.
These types of startups build and maintain open source software that is free for anyone to use, download, or modify. While the software itself is free, these kinds of startups traditionally build a business on top of it by selling customer support or custom-built services for the enterprise.
Investors say they’re still betting on open source as the rest of the tech industry encounters turbulence because several of the best tech companies, like Airbnb or Dropbox, have historically been founded during economic downturns — including many of those like Canonical that build popular open source software.
Indeed, OSS Capital founder and CEO Joseph Jacks says that he expects adoption of open source software to accelerate during this period. It’s often cheaper than proprietary software from the likes of Oracle, SAP, or Microsoft, for starters, which makes it an appealing alternative for companies cutting their IT budgets.
“Open source is much cheaper than proprietary software,” Eric Anderson, Scale Venture Partners, told Business Insider. “Enterprises will look at alternatives to some of the proprietary software they’re paying for.”
There are some structural advantages for these startups, too. Open source software is generally developed by distributed teams of volunteers all over the world. This means that the startups that emerge to support open source software is usually similarly distributed, and more ready to work remotely. That’s an edge in a time of global stay-at-home orders, Jacks says.
“Those companies, in fact, are going to do really well in a society and culture and environment where everyone is forced to be as efficient and as productive as possible using the internet and remote tools,” he said.
Jacks says the current situation has only reinforced his belief in investing in these types of companies because of how the world has had to adapt.
“It’s definitely not changed anything about the way that we get excited in enterprise,” he said. “It only made things more concrete.”
What follows is a compelling list of commercial open-source software startups set for success in 2020, according to 12 VCs. They range from fledgling companies with hardly any funding to well-established ones that could very well be heading for a huge exit. Funding and valuation information are estimates taken from Pitchbook, the keeper of such data.
SEE ALSO: The CEO of Canonical says the coronavirus pandemic could delay its plans to go public in the next few years, but that the crisis will lead to a new generation of open source startups
Databand
Startup: Databand
Total funding raised: Undisclosed
What it does: Databand builds open source software for building, running, and monitoring machine learning code, and helps users collaborate on it.
Recommended by: David Blumberg, Blumberg Capital (investor)
Why it will boom in 2020: “It’s the only solution we’ve seen with an approach so deeply integrated to all the most powerful tools that data engineers use to run their infrastructure, and touches so many different points of the value chain. The product has already become deeply entrenched in some of the most advanced data orgs in the market, and we expect to see a lot of exciting use cases moving forward.”
Elementl
Startup: Elementl
Total funding raised: Undisclosed
What it does: Elementl allows cloud infrastructure engineers, data engineers, and data scientists to easily collaborate and process data.
Recommended by: Eric Anderson, Scale Venture Partners (no relationship)
Why it will boom in 2020: “Everyone talks about machine learning tools. Data quality. Data munging tools. Elementl is building a pretty exciting tool set for that from strong teams.”
Wasmer
Startup: Wasmer
Total funding raised: $150,000
What it does: Wasmer builds tools that developers can use to compile their code to WebAssembly, a popular standard used for building apps that can be run on any hardware or on the web.
Recommended by: Joseph Jacks, OSS Capital (investor)
Why it will boom in 2020: “[Wasmer is the] company behind simplifying and maturing the fast-growing WebAssembly developer stack: runtime, cloud platform, registry and more.”
Cape Privacy
Startup: Cape Privacy
Total funding raised: $2.1 million
What it does: Cape Privacy is a collaboration platform that helps customers securely manage privacy policies and compliance, as well as understand how data is being used.
Recommended by: Ed Sim, Boldstart Ventures (investor)
Why it will boom in 2020: “Today’s data scientists are operating in the ‘Wild West’ of machine learning models without appropriate governance and security. Models are distributed and mostly sitting on individual notebooks. Subsequently, there is a critical business need to secure these models and provide visibility into what data is being used and by whom.”
Optic
Startup: Optic
Total funding raised: $2.5 million
What it does: Optic helps users manage different versions of their software and their APIs (which help different pieces of software communicate with each other).
Recommended by: Ed Sim, Boldstart Ventures (investor)
Why it will boom in 2020: “With Optic, developers have accurate API docs, confidence that everything is working as designed, and workflows that prevent them from breaking one another. The workflow and version control system for APIs is especially important in the new WFH world.”
Last Energy
Startup: Last Energy
Total funding raised: $3 million
What it does: Last Energy was spun out of the Energy Impact Center, which does nuclear research. Its Open100 project open sources the engineering behind nuclear energy projects.
Recommended by: Joseph Jacks, OSS Capital (no relationship)
Why it will boom in 2020: “Last Energy is the [commercial open source software] company behind the Open100 project, open-source designs and specs for democratizing and dramatically lowering the cost for city-level nuclear plants.”
Open Raven
Startup: Open Raven
Total funding raised: $4.1 million
What it does: Open Raven’s data security software prevents cybercrime. It helps customers locate their data is and protects it, alerting security teams about possible breaches.
Recommended by: Bucky Moore, Kleiner Perkins (no relationship)
Why it will boom in 2020: “As enterprises accelerate digital transformation initiatives to bring more of their business online and meet customers where they are today, they are creating more data than ever before, and much of which resides in the cloud. Open Raven provides an open-source solution to gaining visibility into and securing this data.”
Prisma
Startup: Prisma
Total funding raised: $4.5 million
What it does: Prisma builds open source tools for databases, making it easy to access, filter, and sort data.
Recommended by: Bucky Moore, Kleiner Perkins (investor)
Why it will boom in 2020: “[Prisma is] seeing outsized growth in developer adoption of their open source products during this time.”
Robocorp
Startup: Robocorp
Total funding raised: $5.22 million
What it does: Robocorp builds tools for robotic process automation, where software robots automatically handle repetitive tasks, freeing up humans to focus on other work.
Recommended by: David Blumberg, Blumberg Capital (no relationship)
Why it will boom in 2020: “In a world rapidly moving to and adopting RPA/workflow automation, Robocorp has built a cloud orchestration platform enabling open source developed RPA bots to be delivered on demand at a fraction of the cost, ultimately democratizing RPA.”
Chronosphere
Startup: Chronosphere
Total funding raised: $11 million
What it does: Chronosphere builds monitoring software for cloud applications that can collect — and act on — metrics and other data.
Recommended by: Jerry Chen, Greylock Partners (investor)
Why it will boom in 2020: “They can support applications, business metrics, and infrastructure stats at web scale at a fraction of the cost which will be table stakes for all companies.”
Hasura
Startup: Hasura
Total funding raised: $11.31 million
What it does: Hasura builds software that makes it faster and easier to develop applications on Kubernetes, the Google-created open source cloud computing software for running large-scale apps.
Recommended by: Eric Anderson, Scale Venture Partners (no relationship)
Why it will boom in 2020: “Users are calling it the next Heroku.”
(Heroku is a tool for allowing developers to build, run, and operate applications in the cloudthat Salesforce bought in 2011.)
Astronomer
Startup: Astronomer
Total funding raised: $11.93 million
What it does: Astronomer builds a platform to collect and prepare data for customers to use in business analytics.
Recommended by: Deepak Jeevankumar, Dell Technologies Capital (no relationship)
Why it will boom in 2020: “It becomes more and more relevant for bigger customers who have multiple big data engines and they want to string those things together.”
Preset
Startup: Preset
Total funding raised: $12.5 million
What it does: Preset builds an open source data analytics and data visualization platform to help companies make better decisions.
Recommended by: Jerry Chen, Greylock Partners (no relationship)
Why it will boom in 2020: “They are providing tools to developers to build data visualization and dashboards. If every business is a data business then being able to understand your data becomes a necessity.”
Tetrate
Startup: Tetrate
Total funding raised: $12.5 million
What it does: Tetrate helps development teams run and manage micro-services, or small independent services that communicate with each other to make up an application.
Recommended by: Deepak Jeevankumar, Dell Technologies Capital (investor)
Why it will boom in 2020: “It’s a very authentic team from Google. They haven’t seen any slowdown so far in market demand this year … They are helping with transformation and app modernization in the working layer which is a top priority for many CIOs.”
Solo.io
Startup: Solo.io
Total funding raised: $13.85 million
What it does: Solo.io builds Gloo, an open source software that provides the tools needed to “glue” together apps, including service mesh, which helps the services needed to run an application communicate with each other.
Recommended by: Astasia Myers, Redpoint Ventures (investor)
Why it will boom in 2020: “Service mesh offerings are very fragmented, and a recent NewStack survey suggested 46% of those surveyed are evaluating / piloting /or plan to evaluate in the next 12 months, which are nice catalysts for Gloo.”
Dgraph
Startup: Dgraph
Total funding raised: $14.41 million
What it does: Dgraph builds a type of database that makes it easy for developers to find relationships between different types of data, called a “graph database.”
Recommended by: Astasia Myers, Redpoint Ventures (investor) and Eric Anderson, Scale Venture Partners (no relationship)
Why it will boom in 2020: “We are seeing more graph database use cases emerge from fraud detection to social networks to cybersecurity,” Myers said.
“Dgraph is just an awesome graph database and they solve the most important problems of graph databases,” Anderson said.
Cypress
Startup: Cypress
Total funding raised: $14.81 million
What it does: Cypress builds tools in JavaScript, the most popular programming language, for testing applications.
Recommended by: Astasia Myers, Redpoint Ventures (no relationship) and Aaron Jacobson, New Enterprise Associates (no relationship)
Why it will boom in 2020: “Users like Cypress because it is reliable, fast, robust, and doesn’t require knowing domain logic,” Myers said.
“Rhere hasn’t been a lot of innovation in test automation in a long time. Testing is traditionally a cost-setter for businesses, something you have to do. Ideally you can not spend a lot of money and do it in a good way, and Cypress has a really great open source solution. It’s easy to use and it’s cheaper,” Jacobson said.
Weaveworks
Startup: Weaveworks
Total funding raised: $20 million
What it does: Weaveworks develops a platform to manage containers, which are packages of software that include all the code and tools needed to run an application.
Recommended by: Tyler Jewell, Dell Technologies Capital (no relationship)
Why it will boom in 2020: “The company defined the movement around GitOps and sponsored multiple extremely popular open source projects around the concept … Their customers already include many of the Fortune 50 and partnerships with the largest hyperscalers.”
Anyscale
Startup: Anyscale
Total funding raised: $20.6 million
What it does: Anyscale supports the open source project Ray, which is used for building and running distributed applications, or applications located on different networked computers.
Recommended by: Astasia Myers, Redpoint Ventures (no relationship) and Joseph Jacks, OSS Capital (no relationship)
Why it will boom in 2020: “Ray is significantly faster than alternatives, accelerating the development of machine learning models, making teams more productive,” Myers said.
Vercel
Startup: Vercel
Total funding raised: $20.99 million
What it does: Vercel provides the tools needed to build and host web applications on the cloud.
Recommended by: Reid Christian, CRV (investor)
Why it will boom in 2020: “By providing the infrastructure and tooling for modern engineering teams to deploy and host software, they are well positioned to lead this trend.”
Starburst Data
Startup: Starburst Data
Total funding raised: $22 million
What it does: Starburst Data builds tools to help developers quickly access and analyze large amounts of data.
Recommended by: Deepak Jeevankumar, Dell Technologies Capital (no relationship)
Why it will boom in 2020: “For outside our portfolio, I’m a big fan of the company Starburst Data, which supports Presto. [Presto is an open source project for querying big data.] Presto already has quite a few GitHub stars.”
MinIO
Startup: MinIO
Total funding raised: $23.3 million
What it does: MinIO helps developers build their own cloud storage for applications that can be used on the cloud or private data centers.
Recommended by: Deepak Jeevankumar, Dell Technologies Capital (investor)
Why it will boom in 2020: “MinIO is one of the fastest growing open source projects of the last few years … It helps application developers treat storage as an application. We are seeing some of the early growth we saw in MongoDB in MinIO.”
YugaByte
Startup: YugaByte
Total funding raised: $24 million
What it does: YugaByte builds an open source database for applications that can be run on the cloud or in private data centers.
Recommended by: Deepak Jeevankumar, Dell Technologies Capital (investor)
Why it will boom in 2020: “We are already seeing a lot of growth in the open source community and traction for this company. They grew significantly at the end of this year. One of the things we look out for is a team. The team is really authentic. YugaByte has amazingly strong technology. They built the infrastructure stack for Facebook.”
Gravitational
Startup: Gravitational
Total funding raised: $32.17 million
What it does: Gravitational makes it easy for customers to manage, secure, and deliver cloud software, as well as make sure that software meets compliance requirements.
Recommended by: Bucky Moore, Kleiner Perkins (investor)
Why it will boom in 2020: “[Gravitational is] seeing outsized growth in developer adoption of their open source products during this time.”
Coder
Startup: Coder
Total funding raised: $48.11 million
What it does:Coder makes tools that help developers working remotely set up and secure all their processes.
Recommended by: Astasia Myers, Redpoint Ventures (investor)
Why it will boom in 2020: “Overall it improves developer productivity, securely. “
Tigera
Startup: Tigera
Total funding raised: $53 million
What it does: Tigera helps secure applications and networks that run in both the cloud and in on-premise data centers.
Recommended by: Aaron Jacobson, New Enterprise Associates (investor)
Why it will boom in 2020: “Enterprises right now are accelerating cloud. They’re already adopting the cloud. Given the work from home environment, they’re only going to accelerate cloud adoption. Tigera does network security, which more enterprises are going to look at.”
Corelight
Startup: Corelight
Total funding raised: $84.2 million
What it does: Corelight builds cybersecurity software that analyzes network data to help companies prevent cyber attacks.
Recommended by: Steve Herrod, General Catalyst (investor)
Why it will boom in 2020: “It’s been an amazing year of commercial and community growth. Lots of big international customers and awards.”
Odoo
Startup: Odoo
Total funding raised: $105.01 million
What it does: It builds open source enterprise resource planning and customer relationship management software.
Recommended by: Joseph Jacks, OSS Capital (no relationship)
Why it will boom in 2020: “Commercial open source at the innovation application layer is definitely happening. I would expect to see a ton of growth.”
Redis Labs
Startup: Redis Labs
Total funding raised: $146 million
What it does: Redis Labs builds database and cloud-based services that are used for analytics, transactions, and more.
Recommended by: Deepak Jeevankumar, Dell Technologies Capital (investor)
Why it will boom in 2020: “Redis Labs is already a really big company. It has a very very strong caching database and software. The demand is a key part of the modern infrastructure stack.”
Confluent
Startup: Confluent
Total funding raised: $455.9 million
What it does: Confluent builds software for streaming and analyzing data in real-time. For example, Lyft uses it to calculate its ETAs and Capital One uses it to quickly identify fraud.
Recommended by: Ed Sim, Boldstart Ventures (no relationship)
Why it will boom in 2020: “[Confluent] increasingly has become the nervous system for enterprises to stream, move, and analyze real time data from multiple sources.”
Databricks
Startup: Databricks
Total funding raised: $897.36 million
What it does: Databricks builds an analytics platform for big data, as well as the machine learning tools to help data scientists process that data.
Recommended by: Aaron Jacobson, New Enterprise Associates (investor)
Why it will boom in 2020: “Databricks will continue to grow bigger every year. As more enterprises adopt AI, they are growing incredibly quickly. I think they’re going to continue to grow big every year from here on out.”
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