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GitHub Raises $250M at $2B Valuation
- Trufa 11y agoGithub seems to be a pretty good or "safe" investment. Developers have already entrusted them with something as precious as their code itself. They also have pretty clear pathways for being profitable with private repos and so on, I'm not that surprised they are getting a lot of funding.
- hermanmerman 11y agoWell many companies are profitable (actually, it's the only prerequisite to stay alive). And arguably, Github isn't profitable enough to fuel its own growth, or they wouldn't need to take $250m from investors in exchange of shares. The question is: is it worth 2 billion dollars? As a developer my guts say yes, but I have no idea what their numbers look like...
- fosk 11y agoWhen you want to reach a monopoly position, fueling growth with only your profits it's not sustainable. They are getting (cheap) money to scale faster than their profits would allow them to do. It's the same reason why Uber, although making billions of revenue, still raises money: cheap money that boosts growth.
- justincormack 11y agoNot necessarily, they may well be profitable (I thought they are) but they may have wanted to sell some shares to get some value out.
- andruby 11y agoLiquidity for the founders, early employees and previous investors can also be a reason to have another funding round.
- djhn 11y agoWhat kind of situations would result in previous investors looking for liquidity? Assuming it is a trade for equity, it would be counter-intuitive do divest a fast-growing company if you are at least risk-neutral, which VCs should be?
- andruby 11y agoNot VC's. But perhaps friends, family or fools who helped on a seed round. Granted, in the case of Github this seems very unlikely.
- aakilfernandes 11y agoSorry to say, but any time I need a private repo I just head to BitBucket. GitHub provides tremendous value, I hope they find a good way to capture some of it.
- tswartz 11y agoWhen you need a private repo why do you use BitBucket? I've used the private repos on GitHub and found them to work just fine, but I'm new to coding...
- servercobra 11y agoBitBucket private repos are free, GitHub's are not.
- tswartz 11y agoahh.. that makes sense then. :)
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- andrewchambers 11y agoBit bucket is free. This is coming from someone who currently pays for a private github account.
- jamesharding 11y agoBitBucket is free for private repos, GitHub is not (unless you have a student promotion active).
- gabeio 11y agoBitbucket is free for private repos if there are <=5 contributors (unless you have a .edu email = unlimited free).
- hueving 11y agoIt's a bit like a social network. There are better technologies out there (e.g. bitbucket), but like you said, developers have chosen Github for now. However, it would be possible for a mass exodus as they turn up the enforcement on the offensiveness bans.
- chucksmash 11y agoWhy do you say bitbucket is a better technology?
- joeyspn 11y agoI'm not sure if "better", but more versatile for sure since it accepts Git and Mercurial.
- matwood 11y agoBeing able to mark certain branches and non-rebaseable is enough to make it better IMO. Perhaps GH has finally added this functionality, but it wasn't there the last time I checked.
- caffeineninja 11y agoSoon, you can commit your genetic code to GitHub, then just do git diff master..offspring to see where your kid got his blue eyes from.
- aggronn 11y agoOur children will be taught to do all of their homework in git as the 2040 way of showing work! Github for 6th graders!
- jessaustin 11y agoI wish more academics would do this... we'd be able to tell why those results aren't reproducible.
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- cshimmin 11y agoI <3 github... anyone with more business sense than me care to speculate on what this means for us users?
- hueving 11y agoMore censorship to bring repos inline with what is politically correct for a business environment. Enterprises with the big money won't want to have their code on a site that could be associated with anything possibly offensive to anyone.
- darkstar999 11y agoIt doesn't directly mean anything to end users.
- tswartz 11y agoThere may be a reduction in features of the free version and a push to move more people to the paid version. Hopefully they won't move the free features, but build new ones that add additional value for premium users. Ideally, they will keep building for both sets of users.
- darkstar999 11y ago“We want to make really big investments,” expanding internationally and investing in new products, he said. Any speculation? Also, anyone know if they are currently profitable?
- Jare 11y agoA Slack type service would be my first guess for a next product. (rememeber that Slack was already valued at $2.8B ten months ago)
- GauntletWizard 11y agoGithub has already stumbled, and will fall soon. Their gaffes in conduct[1] and content[2] policies are already dividing the community. For a company that has thrived on being a monoculture, this spells doom. [1] https://np.reddit.com/r/programming/comments/3e5c6f/why_the_open_code_of_conduct_isnt_for_me/ https://np.reddit.com/r/programming/comments/3e5c6f/why_the_... [2] https://news.ycombinator.com/item?id=9966118 https://news.ycombinator.com/item?id=9966118
- darkstar999 11y agoYou seriously think censoring the word "retard" will harm their business?
- GauntletWizard 11y agoI think you should think twice before investing or hosting data with companies that engage in tit-for-tat infantile behavior.
- ossreality 11y ago> tit-for-tat infantile behavior. like sh1t posting for 18 hours about how you have a right to be an asshole to whomever you want, anywhere you want, even on someone elses' property?
- izolate 11y agoOf course not, try not to think in such black and white terms. Missteps like these sow the seeds of disdain for companies. Developers are a fickle bunch, and easily hold grudges.
- eropple 11y agoI don't think the loss of patronage of the set of developers willing to choose their tools based on whether they as a company allow their users to slur large groups of people is really on their radar.
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- drumdance 11y agoI've always thought Google should buy them and make that the basis of Google+.
- hrayr 11y ago"The company’s co-founders were inspired by a tech talk given at Google Inc. in 2007 by Linus Torvalds" funny how many successful companies are founded after getting inspiration from a single talk.
- maaaats 11y agoDo you have more examples like this? Sounds interesting.
- laxatives 11y ago"I was inspired by a tech talk", or "I grew up doing this", etc. are better marketing than "I tried a couple things but this was the most successful". Most of these background stories are revisionist.
- Fomite 11y agoOr easily traced. I could claim that my dissertation topic came from a single conversation in a hallway after a talk. And while technically true, that ignores all the effort that laid the groundwork - and the number of hallway conversations that didn't go anywhere.
- chmaynard 11y agoA video of this wonderful Google tech talk is available on YouTube: https://www.youtube.com/watch?v=4XpnKHJAok8 https://www.youtube.com/watch?v=4XpnKHJAok8
- GBond 11y agoI recall one of the co-founders of posted a long comment on the origin of Github.
- gamesbrainiac 11y agoJust $2Bn? Sound a little low to for something like Github.
- paulpauper 11y agoThe problem is monetization. It's not like Snapchat where you have a potential $1+ billion advertising behemoth . I was surprised it was valued as high as it is
- rokhayakebe 11y agoWhen placing an engineer in a company can net you $8,000 to $25,000 you can very well say Github is undervalued. I certainly think it should be more valuable to RHT.
- joeblau 11y agoIt's probably because it has 10 million registered users. When you compare that to something like Instagram, Twitter, or even mobile apps like WhatsApp; it's not a huge user base. That being said, I like GitHubs business model a lot more because their product actually provides me with a lot of value.
- billmalarky 11y agoNot all users are alike. 1 sr engineer is probably worth 1000 teenagers in regards to revenue potential.
- hermanmerman 11y agotablecloth math time: $2bn worth, assuming they're worth 10 times their revenue (let's be generous), that would require $200m in sales. they have 10m users, assuming 1% are paying, that means 100k users for $200m sales, meaning each user must spend 2000 dollars per year at Github. Sounds a little high considering the basic plan is $7/month, but with entreprise sales and growth rate, it sounds feasible.
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- lifeisstillgood 11y agoIn GitHub's position I would not even think of trying stuff myself. The leap from git repo hosting to almost any other profitable and aligned business seems huge. But the leap to HN-style incubator, when you have direct daily connections to more and better coders than YC gets in a year, that makes sense to me. Of course I would want to launch my own businesses, but the sensible money is on building remote working tools, incubators, conferences and so on dedicated to growing the next generation of distributed, remote and profitable companies. Intermediated through git and GitHub, of course.
- fideloper 11y agoWhat I am tremendously curious about is: 1. Is GitHub Profitable? 2. Is taking on funding ultimately heading towards an IPO? Getting sold? (Not that anyone can predict the future, but "just becoming profitable" isn't really a realistic goal of a VC funded company, right?). Is there a way to find out how much of GitHub is owned by whom?
- roflmyeggo 11y agoUltimately headed towards an IPO? Probably. How long? Probably a while. More and more companies are staying private as VC/hedge fund/private equity firm valuations stay high, it's fairly easy to continually raise money through private avenues, etc. There is less of a need to go public for the founders and investors of these backed companies to get rich.
- blizkreeg 11y agoWhat would the exit strategy for a company like Github be? Get acquired by a big co like say, Google or IPO? An IPO and the accompanying scrutiny of a public company sounds like an unlikely strategy for a Github. Thoughts?
- hermanmerman 11y agoGoogle naturally comes to mind. Facebook / Parse, also. Amazon Web Services. Actually any company in this space (that is worth more than $20bn). Why do you say an IPO is unlikely? I don't see why the public markets would be wary: Github is IaaS done right, has clear ways to make money and grow on its current offering, and can very well come up with innovations adjacent to its core services.
- blizkreeg 11y agoRe: IPO I didn't mean to say that the public markets would be wary. Quite the opposite - the short-term scrutiny from Q to Q that a company faces after going public is not for every type of company. Look at Twitter, Yelp etc. I'm not sure if Github is profitable yet, but unlike an Amazon (eCommerce), the market would expect most other companies to show rapid revenue/profit growth once public.
- discodave 11y agoAWS already launched a competitor called CodeCommit.
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- jhund 11y agoI have a hunch that Microsoft may want to purchase Github.
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- joeblau 11y agoThis is actually one of the companies in SV that I really like; I would love to work there, but I don't think they have a lot of mobile application development; That being said I still congratulate them because I love their product.
- calcsam 11y agoBoth this piece, and most commenters, seem to miss the point about where Github's value comes from. It's not for being a social identity for programmers, or hosting open-source libraries. Those are worthy pursuits, but from a business perspective mostly serve as marketing. Github is basically Microsoft Word for programmers, and is an essential part of their workflow. Companies that need enterprise functionality around security and flow configurability move to Github Enterprise and spend, not $7/month/organization, but $20/month per programmer. That's why Github is being valued at $2B.
- deleted 11y ago[deleted]
- arikrak 11y agoGithub currently may use the "social coding" part for marketing now, but it can build off it in the future. For example, StackOverflow built a whole careers site off Q&A, Github can choose to go further based on real code.
- MarkPNeyer 11y ago"github labs used machine learning to generate a simple english -> python translation algorithm. it crawled the millions of commits, looking at comments and commit logs to understand software"
- wstrange 11y agoBut anyone else can do the same (at least for all of the public repos).
- arikrak 11y ago(c. 2028) Github announced today that it has acquired StackExchange, known for its Q&A site for developers and algorithms. This will let Github enhance their own automated software development suite. Github analyzes open-source and closed-source code (under licensing agreements) to produce new software automatically on demand. Currently Github primarily determines a piece of code's functionality from its unit tests, but this acquisition will let them expand their source of knowledge. This may increase the concern among some developers and algorithm managers that Github is becoming too powerful. There has been controversy in the past over Github's restricted API access to open source code on its site. Some developers want to move their code from Github, but they've come to rely on the automatic tools Github provides...
- jtwebman 11y agoI wish they would say what they wanted the money for!
- digikata 11y agoWell, they could buy Sourceforge and Slashdot. Though that might end up a distraction...
- mizzao 11y agoBuying SourceForge and apply a svn-to-git converter on top of everything; that would really cement the monopoly.
- tomschlick 11y agoAnd be completely useless. No one wants to use SF anymore.
- aroben 11y agoSubversion is already supported. See https://help.github.com/articles/support-for-subversion-clients/ https://help.github.com/articles/support-for-subversion-clie...
- pla3rhat3r 11y agoCongrats to the team. Good stuff. Hopefully this means a drop in price (wishful thinking).
- danieltillett 11y agoThe most interesting thing about all these massive fund raisings is why. It is almost as if the managers of these companies think we are about to enter a period where raising funds will be impossible, revenue from servicing the startup economy will dry up, and they will need a massive war chest to survive.
- e40 11y agoSometimes fundraising is to get cash to founders, early investors.
- danieltillett 11y agommm - insiders trying to get out is never a good sign.
- e40 11y agoWell, it happens all the time, so obviously lots of investors, VCs and founders disagree with you. I can be a very bad sign, under certain conditions, sure. It's not meaningful all by itself, though.
- Anderkent 11y agoPeople wanting to rebalance their portfolio isn't really a warning. Someone selling out completely perhaps is; but people need money for things.
- hermanmerman 11y agoWhy wait to find out, when there is money on the table right now? Also, sometimes they have to take a lot of money, as later-stage investors want to control a sizable chunk of the company (in this case, 12.5%).
- danieltillett 11y agoWell I don’t think any company has to take any money, but I agree that it might not be a decision the founders have any control over (board level decision).
- kyleblarson 11y agoIn huge late stage rounds like this is there typically any sort of liquidity provided for non-founder employees?
- dkarapetyan 11y agoOnly $2B. It's definitely worth way more than that.
- daemin 11y agoWhile it's cool that Github is valued so highly in a business sense, some part of me worries that they'll fly too high and burn themselves from it, leading to the end of the service. I hope this does not happen.
- benbojangles 11y agoCan someone help me as i'm confused. This is free opensource code, being stored by a company who is now selling shares for profit?
- robotnoises 11y agoMost of their revenues come from the enterprise market.
- Taek 11y agoValuation aside, why does Githib want $250m? That seems like a lot of money given their current product. I'm sure it's justified I just don't understand why.
- robotnoises 11y agoGood question. My guess is expansion? Perhaps they switch into growth-by-acquisition-mode?
- stephen 11y agoI vaguely know (or assume) that GitHub employs some of the Git core committers, which is great. But this makes me wonder if any of the founders have written Linus a check to show their thanks. Or maybe after they IPO. :-) (Obviously they've done a ton on their own.)
- skuhn 11y agoRed Hat gave Linus some stock prior to their IPO, which was hardly required but a pretty nice gesture. I don't know of any other public examples of a company making stock grants to developers of major building blocks of their ecosystem, but they might be out there. GitHub is under no obligation, but I think they owe as much to Linus as Red Hat did in 1999.
- ihunter 11y agoThis actually seems undervalued to me. The potential for this app is huge, being the platform for all code/product development _ideally_ for every organization. I think they've sorta dropped the ball a bit in that I don't see a ton more integration into the corporate / programmer day to day, something that Atlassian seems to be picking up on. Still, this is an indespensible tool for engineering teams.
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- sidi 11y agoAny attempt to use revenues as justification of the valuation is missing the point, also comments regarding git hosting being a commodity misses it. The valuation imho is a bet that GitHub will be ingrained in developer's workflow and continue to occupy developer mindshare for at least the next decade. Some reasons have already been mentioned in the comments here: * Revenues - It's already the dominant player in git hosting and has better enterprise plans, * Mindshare - GitHub is not just git hosting, it's wikis, issues, gh-pages, atom, and more to come. Each of them are good products in their own right and also create a lot of value by being under the same roof. * Platform - Github is no longer a product, it's an emerging platform. There are plugins / extensions that augment the power of GitHub; zenhub.io (as someone mentioned here) - a case in point. And one point that every comment here has missed is Github's value as a latent hiring marketplace. Unlike LinkedIn / Resumes / Referrals, a github profile is a much better signal for an employer. Punchcards, followers, projects built and contributed to build a very comprehensive visual of a developer, his coding style, tools used. As Github gets more popular, more employers will find value in this providing a reinforcing loop getting more developers to be creating profiles and maintaining them.
- n0us 11y agohow convenient it would be if GitHub could host the repositories you have with the press of a button. I'm betting the investors have seen the success of AWS and think GitHub could capitalize on the convenience of lumping everything together.
- turingbook 11y agoCan not agree with you anymore. GitHub is two things: 1. LinkedIn for Programmers, 2. Development Platform/Toolchains for Programmers. Considering Atlassian valued at 3.3B in last round, GitHub has more potential. However, GitHub should prove itself with real money sooner or later.
- mrweasel 11y agoAtlassian do have products that cater to non-programmers as well, like Jira, HipChat, Confluence and some service desk application. I think Atlassian would naturally be worth more than GitHub, simply due to the larger potential user base. I don't think we know what profits either company has, and without that information it's hard to know if the valuations are realistic.
- melted 11y agoWhat's so "awesome" about Github? It doesn't even have proper codesearch like Google used to have before they shut their code hosting down. I seriously don't get it. For my own needs I just host my own Mercurial and hgweb. It takes all of 5 minutes to set up, and provides all I need.
- embik 11y agoI can only speak for myself, but I love GitHub because it's easy accessible for me. When I was learning how to use git and code in general (well, I'm still in that process to be fair), it's great to have a visualitation of what you're actually doing. It's even better when that interface is well-designed (at least I consider GitHub to be great UX), so you don't have to learn using another UI on top of all the new stuff you already learn as well. I think that's a factor you underestimate when you've been working with revision control and code for a long time. Additionally, the collaboration aspect of GitHub is great as well - As it's a big plattform, a lot of developers already have a GitHub account and it's very easy to contribute with forks and pull requests. Submitting patches via mailing lists isn't everyone's cup of tea.
- tomphoolery 11y agoJIRA/Stash/et. al isn't so bad, but I definitely prefer using GitHub Issues or Trello for my own projects. ZenHub looks pretty cool too. Definitely think the way that we use JIRA at my office is the only way to use it "right", in the sense that we basically track everything with JIRA tickets, from IT maintenance requests to operations bugs and project management tasks. The automation between JIRA and Stash is also 10% awesome, with that other 10% lost because you can't specify a code reviewer in a Stash pull request and have that person be automatically assigned to the JIRA ticket you're working on in the branch. Little failures like this are commonplace among the Atlassian toolset, which is why I don't like using it quite as much.
- mindsocket 11y agoI'm a product manager for Stash, and was curious about your expected Stash/JIRA workflow. Why would a reviewer be assigned to the JIRA ticket? They're assigned to the pull request for the issue that the author is assigned to (who did the work). Are you wanting to have a JIRA-only view of work that needs doing, including review?
- techtivist 11y agoIf this valuation is based on the "future potential" of GitHub, I would keep track of GitHub's data ownership policy. I wouldn't be surprised if all of a sudden GitHub decides it owns the commercial rights to all code hosted on GitHub, at least for the free plan ;)
- kgc 11y agoI thought they already raised enough money to never need to raise again?
- crc32 11y agoIs anyone else just waiting for GitHub to capitalise on its brand with a move into source control for the rest of the enterprise? Stuff like the swipable image diff: https://github.com/blog/817-behold-image-view-modes https://github.com/blog/817-behold-image-view-modes or map diffing: https://github.com/blog/1772-diffable-more-customizable-maps https://github.com/blog/1772-diffable-more-customizable-maps are truly fantastic features; I imagine they already have some sophisticated diffing algorithms and visualisations in the pipeline for word docs, spreadsheets etc. I guess there are some ease of use issues; (minor, imho) and there is a - possibly better - paradigm in collaborative editing a la Google Docs? But otherwise i'm sure a "github appliance" would work pretty well in a lot of non-software environments.
- DrMJG_HN 11y agoCongrats to the Github team from Livecoding.tv. Keep the good job up!
- kriro 11y agoApart from being really easy to use and taking some pain out of git (arguable since we're talking about developers but could be worth more if they branch out to authors etc.) the major value of GitHub is the brand name. It's a tool based network effects grab of sorts which is why the social components of GitHub are very important (imo). However I'm not sure the network effect is as big as it needs to be. Theoretically it's not that hard to migrate the entire network (-the revenue generating parts but it's the OS stuff that generates the network effect). I'm not entirely sold that the brand is strong enough and can't be overtaken by competition. So far they seem to have a friendly relationship with GitLab et al. but it will be interesting to see how they'll handle those in the future. My guess it they'll try to acquire whoever they perceive to be the biggest fish. That being said, the valuation seems acceptable to me given the current standing of GH. While the switching cost is low in monetary terms (and technically not hard) if you compare it to other brands where the switching cost is low in monetary terms like Coke vs. Pepsi the valuation makes more sense. I'd also argue that developers tend to not switch around wildly as long as the tool is perceived to do it's job well (which GH does).
- tn13 11y agoI have 0 expertise on valuations so would not comment on that but I do think that github has a near monopoly when it comes to hosting a popular open source project. Git* sites are pretty much same as Github but they simply dont have the traction and are unlikely to have till github does something stupid. This is very similar to the fact that while Android is open source any any device manufacture can make an Android phone, only Samsung seems to be winning while everyone seems to be a minor fish in the pond. I will really really be surprised if investors did not assign a value to this.
- vasilakisfil 11y agoI thought they could fund themselves...
- ed_blackburn 11y agoIf the could nail "issues" like they have "wiki" and can add a chat product of similar quality the $2B valuation looks not just plausible but perhaps an undervaluation. They have a kick arse API and there's a busy ecosystem around it, but I wouldn't mind seeing github write a few new client / products that supersede issues themselves. If they dogwood issues with collaborating external organisations in private perhaps they'll find the nirvana we all crave?
- ryandaigle 11y agoDoes this mean gists can have comment notifications again?