3 ms·

What is it about the funding environment that makes VCs suddenly willing to fund companies built around open source python libraries? They generally aren't beat

What is it about the funding environment that makes VCs suddenly willing to fund companies built around open source python libraries? They generally aren't beating the AI drum, but are they benefiting by proximity to AI via python?

TAForObvReasons 3y ago
It’s not sudden and it’s not limited to python libraries. The popular open source projects make great targets for low-multiple acqui-hires, derisking the investment. They also have huge established branding and generally obvious opportunities for displacing existing players. In a non-zero interest rate environment, those factors make established open source projects a more appealing bet. Since they mentioned the company, undercutting and eating the market share of DataBricks is enough to appeal to some investors.
antidnan 3y ago
VCs have been doing this for a while, but not limited to python
lmeyerov 3y ago
Python is growing well, even relative to Java, for $$$ data stack stuff that VCs have a reason to like Compare: Funding databases is some of the most appealing for sw infra VC b/c as business fundamentals like monetization (pay for hosting, data, etc), growth, retention, are some of the most successful & low-risk Funding the sw compute tier is a peg down but appealing for similar reasons. Basically same-but-weaker than DBs on the above dimensions, but still worth it as customers struggle w/ compute at scale (technical + business), so still works. Think early databricks vs snowflake, and how databricks grew to owning more than compute to data lakehouse, dashboards, etc: started as pure compute and now closer to snowflake. Python is popular for a lot of these compute tier stacks. Orchestrators, AI, ETL, etc. The technical, social, & economic reasons are all interesting & relevant for why.
- vosper 3y ago
  Where’s the profit in funding a library, though? The others examples you gave are SaaSable, I don’t see that for a library. Paid support, sure, maybe, but does that get the kind of return a VC needs?
  - lmeyerov 3y ago
    They're not selling the library but a managed cloud runtime for a scaleout compute tier. The clientside library is part of the freemium, and as workloads need to go bigger, they want to be the easy button for that. That's similar to anyscale (ray), coiled & saturncloud (dask), and early databricks (spark). Managing infra for that kind of thing is annoying. These companies don't OSS their cloud stack. Wishing them luck! A lot of arrow-core compute tier & db co's emerging, so cool to see the many years paying off.
    - vosper 3y ago
      > They're not selling the library but a managed cloud runtime for a scaleout compute tier. The clientside library is part of the freemium, and as workloads need to go bigger, they want to be the easy button for that. That's what I had missed - thanks.
esafak 3y ago
They already have distribution; the question of whether the product is wanted is answered, derisking the investment. All that's missing is monetization.
benglish11 3y ago
Databricks was started by the creators of Spark which was/is an open source library. This looks to be aiming for a similar goal.

TAForObvReasons 3y ago

It’s not sudden and it’s not limited to python libraries. The popular open source projects make great targets for low-multiple acqui-hires, derisking the investment. They also have huge established branding and generally obvious opportunities for displacing existing players. In a non-zero interest rate environment, those factors make established open source projects a more appealing bet. Since they mentioned the company, undercutting and eating the market share of DataBricks is enough to appeal to some investors.

antidnan 3y ago

VCs have been doing this for a while, but not limited to python

lmeyerov 3y ago

Python is growing well, even relative to Java, for $$$ data stack stuff that VCs have a reason to like Compare: Funding databases is some of the most appealing for sw infra VC b/c as business fundamentals like monetization (pay for hosting, data, etc), growth, retention, are some of the most successful & low-risk Funding the sw compute tier is a peg down but appealing for similar reasons. Basically same-but-weaker than DBs on the above dimensions, but still worth it as customers struggle w/ compute at scale (technical + business), so still works. Think early databricks vs snowflake, and how databricks grew to owning more than compute to data lakehouse, dashboards, etc: started as pure compute and now closer to snowflake. Python is popular for a lot of these compute tier stacks. Orchestrators, AI, ETL, etc. The technical, social, & economic reasons are all interesting & relevant for why.

vosper 3y ago
Where’s the profit in funding a library, though? The others examples you gave are SaaSable, I don’t see that for a library. Paid support, sure, maybe, but does that get the kind of return a VC needs?
- lmeyerov 3y ago
  They're not selling the library but a managed cloud runtime for a scaleout compute tier. The clientside library is part of the freemium, and as workloads need to go bigger, they want to be the easy button for that. That's similar to anyscale (ray), coiled & saturncloud (dask), and early databricks (spark). Managing infra for that kind of thing is annoying. These companies don't OSS their cloud stack. Wishing them luck! A lot of arrow-core compute tier & db co's emerging, so cool to see the many years paying off.
  - vosper 3y ago
    > They're not selling the library but a managed cloud runtime for a scaleout compute tier. The clientside library is part of the freemium, and as workloads need to go bigger, they want to be the easy button for that. That's what I had missed - thanks.

esafak 3y ago

They already have distribution; the question of whether the product is wanted is answered, derisking the investment. All that's missing is monetization.

benglish11 3y ago

Databricks was started by the creators of Spark which was/is an open source library. This looks to be aiming for a similar goal.