Big news today from Chef who announced a $40m Series E round of financing. This round and its size is indicative of the continued high demand of DevOps in general and for a leader in the space like Chef. The round was led by DFJ Growth. Existing investors Battery Ventures, Citi Ventures, DFJ (venture), Ignition Partners, and ScaleVP also participated. Other noteworthy new investors in this round are: Millennium Technology Value Partners & Hewlett Packard Ventures (as a strategic investment).
I had a chance to speak with Barry Crist, CEO, Chef. Of course Barry was very excited about the raise (what CEO wouldn’t be) but what really made an impression on me is that Crist was excited on several levels about this announcement:
- While Chef didn’t need the capital right now, as Crist says, “the best time to raise money is when you don’t need it.”, The money came at a time when the global market for DevOps is exploding and Chef is exerting its leadership in taking DevOps to the mainstream. With more than half of the Fortune 50 using Chef, 80 percent of Chef’s exponentially growing revenue comes from enterprise businesses.
- Chef has scored a rare double of both DFJ Growth and DFJ Venture investing in Chef. Having both arms of the well known investment house among Chef’s investors is both a testament to how much they value Chef and how well Chef has performed to date.
- The strategic investment by HP Ventures represents one aspect of a deep and growing relationship between HP and Chef. HP is poised to be a strategic partner bringing Chef to its large world-wide channel. This investment speaks volume about HP’s commitment to this relationship.
- A full house for Chef. With the HP investment, Chef now has deep strategic relationships with Microsoft, AWS, IBM and HP. This represents a “full house” of major technology partners and bodes well for Chef to continue its dominance as the leader in DevOps automation.
This was a series E round for Chef and I did not ask Crist what type of valuation this money was raised at. But one of the nice things about raising money when you don’t have to is that generally you can afford to be a little pickier and get better valuations when you raise money.
I had a chance to speak with Crist about his outlook on the VC and investment market. With many voices chiming in that we might be seeing a dip in investment and valuations in the tech market, Crist said he didn’t have a crystal ball. But all the more reason to raise this money now. If the market does turn those with cash in the bank and dry powder will be in the cat bird seat to leverage their capital for strategic purposes. We might very well see Chef as an acquirer of technologies to tuck in as they continue to grow.
In the meantime, a rising tide will lift all boats. This kind of investment and buzz in one of the DevOps market leaders should help other DevOps companies in their own capital raising activities. While few may achieve the heights that Chef is rising too, there is lots of room in the market for DevOps companies of all shapes and sizes.
Congratulations to Barry and the rest of the Chef team on this raise and looking forward to see what the future holds.