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Vercel raises $150M Series D
- giorgioz 5y agoIt seems Round C of $102M was just in June 2021. https://techcrunch.com/2021/06/23/vercel-raises-102m-series-c-for-its-next-js-based-front-end-development-platform/ https://techcrunch.com/2021/06/23/vercel-raises-102m-series-... What are the reasons for two rounds so close to each other?
- asaddhamani 5y agoIs it just me or have rounds been getting much larger these days?
- ryanSrich 5y agoThey’ve been ballooning for years. Seed rounds are now $3-$10m, A rounds are $20-$50m, etc. The amount of money flowing into venture capital is unprecedented. I run a startup that raised a seed round in June. I’m a co-founder but I’m our CTO, not CEO and I still get 5-10 emails per day from random VCs asking if we need funding. There’s no way this ends well. But I think it’ll take a decade to shake out.
- ewuhic 5y agoHow much of a networking does one have to do to achieve such a number? And is your product past MVP?
- deleted 5y ago[deleted]
- ryanSrich 5y agoMy co-founder and I ran a startup before this, which was also VC-backed, so we had around 6+ years of networking built up from that. You meet hundreds of VCs along the way. So it was never an issue of finding investment for this new venture. It was finding the right investors. We raised our pre-seed round in 2020 without anything, just a pitch deck, and fully remote. We didn't meet our investors in person until several months after closing on the round. We raised our Seed this June based on having roughly 100 companies using our product, a good percentage paying us. So while I wouldn't say we raised our Seed round with PMF, we were (and are) showing signs of PMF. So yeah, our product is a bit past the MVP stage, but not by much. We still have bugs that come up almost every day, and we fix them as fast as we can. However, the product has matured greatly in the last six months.
- ewuhic 5y agoAnd what does the "right innvestors" mean in this context, if, I assume, the thickness of the wallet is not an issue here?
- ryanSrich 5y agoIt’s a few things. - positive reputation. Other founders enjoyed their experience. - provide value through their network. This is the foundation YC built themselves on. Investors that introduce you to paying customers, other founders, other investors, etc. - leave you alone and only help when you ask for it. These are the best types of investors. They provide advice only when you ask. Those are the most important things.
- vmception 5y agoyou have to look like money in the environment you are raising capital in, in which case the networking is more fruitful and your company can be more flimsy. if you have a different physical look or unfamiliar background, the metrics for your existing company are way more important and the bar is much much higher and the multiples investors accept are way way lower. or just do a crypto version, which is much more inclusive, global, faster, and leapfrogs this rodeo.
- MadeThisToReply 5y ago> There’s no way this ends well How do you think it will end?
- cj 5y agoNot the original poster, but economies work in cycles... so eventually money won't be free, and funding won't be so easy. When that happens, lots of VC-fueled companies will shut down. In other words, I think it ends with a return to a funding climate similar to 2015-2016 where money was available, but money also wasn't free. And financing rounds were smaller.
- randomsilence 5y agoAren't we close to an abundance of energy and thus a huge expansion of the economy? There will be much more resources that can be bought with money, so money will be worth more, compensating for any bubble that is created right now.
- tata71 5y agoInvestors always buy when there is blood in the streets.
- carnitine 5y agoBut the current environment is about as far from blood in the streets as is possible. ATHs for practically everything.
- bhouston 5y agoI guess because they can? They must have phenomenal growth numbers.
- mbesto 5y agoSuper simple answer - because there is an unprecedented abundance of capital (to the tune of nearly $1T for private capital markets) and they were very likely oversubscribed on that first round. So...why not?
- MathCodeLove 5y agoWhere do you get this information? I believe you, but I'd like to look more into it.
- mbesto 5y agohttps://www.bain.com/globalassets/noindex/2021/bain_report_2021-global-private-equity-report.pdf https://www.bain.com/globalassets/noindex/2021/bain_report_2... Page 19 FTA: It’s hardly surprising that many GPs were afraid Covid-19 would put an end to the past decade’s golden era of private equity fund-raising. But those fears turned out to be unwarranted. Global fund-raising of $989 billion was a decline from 2019’s all-time record of $1.09 trillion (see Figure 18). But it was still the third-highest total in history, and if you add in the $83 billion raised for SPACs, it was the second highest. All told, the industry has raised almost $5 trillion in capital over the past five years. Buyout funds alone raised about $300 billion in 2020, or $340 billion if you include SPAC capital aimed at buyout-type targets, estimated at $41 billion (see Figure 19).
- MathCodeLove 5y agoThank you!
- hackitup7 5y agoIf you're asking about the oversubscription, many fundraising rounds these days are highly competitive and oversubscribed due to an abundance of capital. So it's common for hot companies to have many suitors.
- MathCodeLove 5y ago
- FBISurveillance 5y agoBecause when the sun is shining, you go make hay.
- leerob 5y agoLee from Vercel here. Happy to answer any questions about Vercel and our plans for this new round of funding.
- zain 5y agoAny support fo HIPAA compliant workflows?
- jjallen 5y agoThanks Lee. So what are your plans for this funding? I know that Vercel just raised $100M a few months ago (it seems).
- leerob 5y agoWe're using the funding to: - Support open-source projects - Make the Web Edge-first - Build the end-to-end development platform - Grow our team Happy to dive further into any of these. We did raise our Series C in June: https://vercel.com/blog/series-c-102m-continue-building-the-next-web https://vercel.com/blog/series-c-102m-continue-building-the-....
- terpimost 5y agoVercel is great! Any plans to have some kind of DB or object storage?
- leerob 5y ago:)
- outside1234 5y agoWhat do you mean by edge first?
- leerob 5y agoWe believe the future of the frontend is "at the edge"[1], meaning it's as close to your customers as physically possible. The only way to beat the speed of light is to be closer[2]. Frameworks and tooling should be designed with this constraint from the start[3]. [1] https://vercel.com/edge https://vercel.com/edge [2] https://rauchg.com/2014/7-principles-of-rich-web-applications#pre-rendered-pages-are-not-optional https://rauchg.com/2014/7-principles-of-rich-web-application... [3] https://vercel.com/features/infrastructure https://vercel.com/features/infrastructure
- snarf21 5y agoMoney is free right now, get while the getting is good.
- MathCodeLove 5y agoIn that case I'll take 12 money please.
- qeternity 5y agoIt’s free. Why only 12?
- MathCodeLove 5y agoCan't get greedy now, I don't want to be responsible for the next wave of hyper-inflation.
- tigerlily 5y agoGo on, have some more. It's only money :)
- hef19898 5y agoDependa on the unit of measure behind money, that was never specified!
- dang 5y agoWe detached this subthread from https://news.ycombinator.com/item?id=29317827 https://news.ycombinator.com/item?id=29317827.
- tekkk 5y agoNow that's a lot of money. It seems admirable to have "Support open-source projects" as their first item but I wonder what portion of that funding goes to open-source. Is it an euphemism for hiring open-source maintainers to work on integrating their projects to Next.js stack? I mean certainly Vercel aren't just donating the money away. But I assume most of the money goes to hiring new folk. Dunno how much new engineers you can get out of it. Anyway, good for them.
- leerob 5y agohttps://news.ycombinator.com/item?id=29318420 https://news.ycombinator.com/item?id=29318420
- deleted 5y ago[deleted]
- cryptica 5y agoNo wonder the US dollar is about to hyperinflate. They're printing it like crazy and handing it out to speculative projects whose clients' revenues are also all denominated in worthless USD. USD has become a liability for the world. The only reason China doesn't dump all their USD reserves is because they know the global economy will pop instantly because there's no real value behind it to support such big, unfairly distributed numbers in the pockets of so many unproductive people. The world is simply afraid of what comes next but they will have to face it regardless because time is running out and citizens of the world are tired of propping up this fiat pyramid scheme.
- robjan 5y agoIf the USD is hyperinflating then pretty much every other currency is also hyperinflating too. Check the other major currencies like Euro, GBP and JPY. The US Dollar is actually strengthening against these currencies and these countries don't have enourmous USD reserves.
- cryptica 5y agoAll reserve banks print to maintain a stable exchange rate so they will naturally all hyperinflate together. EU governments are dumping a lot of euros on grants for useless speculative tech projects which have no chance of delivering anything of value. It's infuriating to be part of this system. Then people wonder why many don't trust the media or vaccines... That said, I don't understand why the fiat exchange rates are stable (USD even coming out ahead as you say) but inflation is not even. In Europe, I'm not seeing any noticeable inflation in consumer goods but apparently consumer goods inflation is very noticeable in the US... But you'd think this uneven inflation should affect exchange rates. Why can't Americans get the same price for the same product as Europeans can? That should be a major arbitrage opportunity. IMO, there is some serious manipulation going on here to prop up the USD and this may be what is causing the inflation and shortages in spite of stable exchange rates.
- machiaweliczny 5y agoWhat, EU has big inflation problem as well. The real economy problems might start Feb 2022 from China according to Cathie Wood. I think investor know and rush to IPOs till the sun is shining. Also agree that EU does distribution wrong way. It would be better if they simply gave more cash to extend reach of already succesful companies, maybe. Or just sane law to fund startups via shares EU wide.
- malthaus 5y agoFor me as a casual observer of the space, the 2.5bn valuation seems mind-boggling. How?
- ratww 5y agoNetlify is also at 2bn [1] I think it makes complete sense. There's a lot of room to grow in this space. There's a lot of money going into tech salaries, and even then it's hard to find people. Anything that saves developer time and saves companies from having teams to build and manage cloud infrastructure is honestly very promising. [1] https://pitchbook.com/newsletter/netlify-captures-2b-valuation-with-105m-round https://pitchbook.com/newsletter/netlify-captures-2b-valuati...
- deleted 5y ago[deleted]
- zild3d 5y agoDon't know specific growth numbers, but vercel is winning a lot of mindshare in frontend land see nextjs repo: https://github.com/vercel/next.js/ https://github.com/vercel/next.js/ and for frontend infra, vercel is a pretty great developer experience. Just hookup your github repo and on commit its deployed, behind CDN, preview branch URLs, etc
- machiaweliczny 5y agoI am most intrigued by Calendly valuation and their game plan.
- carlsborg 5y agoImpressive execution and product strategy.
- leerob 5y agoThank you so much!
- ghoomketu 5y agoThey have such a terrible landing page though. Having heard of this first time I tried looking it up and all I see is this: > Vercel combines the best developer experience with an obsessive focus on end-user performance. Our platform enables frontend teams to do their best work. The heading above it is even more nonsensical. So many words which convey absolutely nothing to me. Can anyone please tell me what does it do? Is it a cdn or some kind of hosting?
- illumanaughty 5y agoTo be fair they jump right to the nuance of why you'd choose them, assuming you know who they are. Coca-Cola's website doesn't tell you what coke is, it talks about experiences/moments..etc. I share your frustration to some extent but I understand their reasoning.
- jollybean 5y ago"To be fair they jump right to the nuance of why you'd choose them, assuming you know who they are. Coke is 1) a drink. and 2) 7 Billion people know what it is. Vercel is 1) complicate and 2) nobody knows who they are. It's such an embarrassing problem for them, I find it hard to fathom how they even have new users, much of their language is dense and ridiculous like this.
- icemelt8 5y agoUmm, if you don't know what Vercel is, tbh you're living under a rock. Its now the default way to host a webpage.
- lamnk 5y agoCoca-Cola, Nike ... are some magnitudes different in brand recognition. They can afford to do that. I find it quite frustating when I'm on some startups' websites and after 1-3 clicks around I still don't know what their products or services do, lost in marketing/tech jargons. After that I just quit. Come on people, use English!
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- ushakov 5y agocan someone eli5 why investors are throwing so much money at Vercel, Netlify and Gatsby? what kind of promises are they making in exchange of the capital? why don't more capable platforms like Render or Fly.io raise as much?
- lghh 5y agoWhat about Render and Fly.io make you feel they are more capable?
- thewarrior 5y agoThese companies can get big enough to be acquired by AWS , Azure at some point. This is now the new Heroku. The next big startup could be an application on Vercel maintained by 2 people instead of a tangle of micro services and AWS configurations maintained by 20.
- ushakov 5y agothey don't run backend/databases though?
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- jSherz 5y agoTake careful notice of the restriction hidden behind an "i" icon on https://vercel.com/pricing https://vercel.com/pricing that you can have max 10 users on the Pro plan before your frontend team has to have a sheepish conversation about how much the Enterprise tier is.
- detaro 5y agooof, that's ugly to hide like that.
- tomrod 5y agoIndeed. Hey enterprise sales folks. If you want me to use your enterprise services, post your prices. We're all adults here. If I can't afford your offering and you still want my business, we can work out a discount. If you're going to make me hop through hoops to find or determine pricing, you go directly to the bottom of my comparison list, and possibly leave it altogether. If you're truly the only option in market you _might_ make it if I can't afford to build your service. Stop foggy pricing. We've known since at least 2013 this is a bad economic practice. [0] Miravete, E.J., 2013. Competition and the use of foggy pricing. American Economic Journal: Microeconomics, 5(1), pp.194-216.
- ushakov 5y agothat's not how enterprise sales work if you want them to have your business, then you have to post your budget it's a great way to filter out orgs that have no money to begin with and big businesses might be paranoid about their competitors knowing their costs
- tomrod 5y ago> if you want their business, then you have to post your budget Getting someone's business means they are paying you.
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- idkwhoiam 5y agoIMO this is .com bubble v2 in the making Edit: grammar
- lghh 5y agoWhy do you say that?
- missedthecue 5y agoPets.com, the poster child of dotcom era excess, IPO'd at a $290 million valuation, and never had a market cap that exceeded $1 billion. Today there three or four companies in the EV space alone that are either outright universally known frauds (Nikola) or where senior management has told investors that they will run out of money before ever making a product. Yet they all have billion dollar+ market caps (Workhorse, Lordstown, etc...) Rivian, Tesla, and Lucid do have products but are worth $1.3 trillion together. What do you call that if not insanity?
- lwb 5y agoWhat do public EV markets have to do with private PaaS VC investments? You would have a case if Vercel has no revenue, or no chance of becoming profitable. I don't know their numbers, and I'm sure the multiple is high, but relating this to EVs is a non-sequitur.
- missedthecue 5y agoEVs are also venture funded startups, and the excess is more obvious there than in an obscure PaaS company. But still, two $100 million rounds within months of each other, as Vercel has done, is pretty outside of the norm.
- 1270018080 5y agoFixation on vehicle companies isn't really relevant here.
- latenever721 5y agoCan’t believe
- jmacd 5y agoI wonder how much of this round is secondary purchases of common stock from the founders. I would guess it's a pretty significant amount.
- eoinboylan 5y agoEmployee's get in on secondaries also.
- jmacd 5y agoThey do! My comment wasn't meant to be cynical. I'm just assuming the majority of a secondary would be to the founders.
- webdeployer 5y agoThey've been raising what, 2 rounds per year at this point? If they're burning through cash at that rate, it seems like it's time to host stuff on something more sustainable like Digital goddamn Ocean One of these days Series K will fall through and the amazing future of web platform will shut everyone's websites down
- LisaDziuba 5y agowow....
- friedman23 5y agoI'm happy for the folks at vercel, Next.js is really an amazing framework. Wish you all the best.
- tibiahurried 5y agoIsn't already super trivial to get a nodejs app and running in not time on AWS or GCP? Why would I pay for this?
- rudian 5y agoSounds like you never used Vercel now AWS. I wouldn’t call AWS “super trivial” nor is Vercel equivalent.
- abxytg 5y ago"Isn't already super trivial to get a nodejs app and running" No. Hosting a node server on a bare metal vps is not "trivial". You need to deal with routing, auth, etc and that's even before you get a user on a different continent. I think its a worthy exercise for new programmers but IMO there is 0 reason to waste the time and mental overhead. Im sure we all have about 6 projects languishing because we dont want to ssh into an instance and remember what the hell is going on in there. Maybe just me.
- jmondi 5y agoAm I the only one around here that is less and less excited about Vercel as they raise more and more money?
- vvoyer 5y agoSince your comment is popular you may not be the only one but then the question is: why? I am genuinely wondering why you would get less and less excited the more they raise. Any specific reasons? Thanks!
- jfoster 5y agoI think it should be the opposite. When they were raising from just Google, I was worried they might get acquired and ruined. If they raise so much that they have to IPO, great!
- giorgioz 5y agoYes personally I'm afraid at some point Vercel will just sell out like Heroku did with Salesforce and stop investing in R&D.
- soorajsanker 5y agoCan we expect IPO next year :p ?
- aogaili 5y agoVercel might end up becoming the open source gig economy, the Uber of open source. With that investors money coming in, there has to be a winner takes it all market strategy that they are after. I suspect that VC money will be used to acquire and influence key open source contributors, and commercialize their work after giving them fixed salaries to work on their projects. I'm hoping to see them hiring more people to work on open source as oppose as acquiring the already well sponsored ones. Anyway, congrats to the team and their success thus far! and I hope they keep the healthy spirit of open source.