On Wednesday, DigitalOcean, a cloud hosting startup that competes with Amazon’s web services, has secured $83 million in a Series B round of funding led by Access Industries owned by billionaire Len Blavatnik. Existing backer Andreesen Horowitz participated in this round.
Launched in 2012, the startup DigitalOcean is a simple cloud infrastructure provider built for developers which has now become the world’s second largest cloud infrastructure provider for developers building website and applications. It provides access to virtual servers with tiers of computing power and customers can pay monthly or hourly for the service. The startup claims revenue grew 193% in 2014 after a 6000% increase in 2013 and has over 250,000 active users.
CEO and cofounder of DigitalOcean Ben Uretsky said, ” We began with a vision to simplify infrastructure that will change how millions of developers build, deploy and scale web applications. Our investors share our vision and they will be essential partners in our continued growth. ” We are laser focused on empowering the developer community,” Mitch Wainer, co-founder and CMO at DigitalOcean. “This capital infusion enables us to expand our worldclass engineering team so we can continue to offer the best infrastructure experience in the industry.”
With the new funds, the startup is planning to widen its features, make it more appealing to the wants of the software developers and scaling startups running the company’s distributed applications in production. Since its launch, the company has been supportive for the increasing influence of software developers and the numbers look to support its vision. Until today, over 6 million Droplets/cloud servers have been used on DigitalOcean by over 500,000 developers. Pueo Keffer, head of venture capital at Access Industries said, ” Technology represents the foundation on which today’s greatest companies are built. DigitalOcean is uniquely positioned to grow with the developer community, which create and maintains this very foundation.”
The market for public cloud platforms, that includes infrastructure vendors is projected to reach $44 billion in 2020, according to Forrester Research Inc. Businesses as diverse as 3M Co and startup Airbnb Inc look to use the cloud services offered by the bigger brands like Microsoft and Amazon. Meanwhile, DigitalOcean works on attracting and retaining individual developers and small-scale entrepreneurs to capture growth in the market. To focus on the under-tapped market, it has developed technology like TaskRabbit, JQuery Foundation, and InfluxDB. Rates start from $5 per month for 1 TB to transfer capability and 512 MB of storage to high volume plans costing $640 per month for 9 TB of transfer and 64 GB of memory.
“We are not looking to steal the largest customers,” said Uretsky. ” It’s really about the 20 million software developers that live in the world today and the 30 million that will be there by the end of the decade, for us to build a tool for them.”