In what may be the biggest round of investment yet in the DevOps space, JFrog announced today that it has closed its Series D round of funding totaling $165 million. The round was led by a new investor, Insight Venture Partners. Jeff Horing, co-founder and managing director of Insight, will join JFrog’s board.
JFrog, the developers of Artifactory and other artifact-related software, has recently taken a higher mission to develop a platform named JFrog EnterprisePlus, a first-of-its-kind, universal DevOps platform. According to JFrog, the money raised “will drive JFrog product innovation, support rapid expansion into new markets and accelerate both organic and inorganic growth.”
The company had raised something in the area of $65 million in previous rounds. It has also made several acquisitions to add both new functionality and geographical reach.
As readers of DevOps.com are aware, we have closely followed JFrog’s progress over the years, as the company represents a good example of how vendors are growing and establishing themselves in the DevOps market.
We had a chance to sit down and speak with JFrog co-founder and CEO, Shlomi Ben Haim, about this latest news. Our conversation can be listened to below, followed by a transcript of our chat. Enjoy and congrats to the JFrog team.
Alan Shimel: Hey, everyone. It’s Alan Shimel, DevOps.com. You’re listening to a DevOps Chat, and we’re here breaking some big news this morning. The folks over at JFrog, makers of Artifactory and several other great projects and products, have announced what may be one of the largest rounds ever in the DevOps space, $165 million, I believe, but joining us is Shlomi Ben Haim, co-founder, CEO of JFrog, and he can tell us all about it. Shlomi, welcome.
Shlomi Ben Haim: Hey, Alan. Great to meet you again. Thank you for having me.
Shimel: Thank you, my pleasure. So Shlomi, as I mentioned earlier, exciting, big news coming from JFrog today. Did I get the number right, $165 million round?
Ben Haim: Yes. [Laughs] You got it right. It’s $165 million, series D.
Shimel: So first of all, Shlomi, congratulations. You know, raising any amount of money is never easy; raising this kind of money is truly an unbelievable task I can’t even imagine. So congratulations to you and Fred and Yoav and the whole team at JFrog on this accomplishment.
Ben Haim: Thank you very much, Alan. We are not taking it for granted and we are very, very excited. Thank you.
Shimel: Good. So Shlomi, I understand Insight Venture partners led the round, is that correct?
Ben Haim: That’s correct. Insight Venture led our series D. Jeff Horing will be the partner that will join our board.
Shimel: Excellent. And talk to us a little bit – they led but your existing investors participated. Any other new investors?
Ben Haim: Yes. So this round actually was one of the best experiences [laughs] we ever had in the landscape of fundraising. We had awesome partners reaching out to us throughout the, I don’t know, last three years, and we started to build a relationship with all of them. And one of the things that we wanted to make sure in this round is that we would have funds that understand late stage and understand mature companies with mature products in the market, and this is how we met Insight and some other great VCs. Together with Insight in this round, Spark Capital joined us with Alex Clayton and Geodesic, that you probably know, that have some presence in Japan. Other than that, Battery really supported this round. Battery is one of our current investors alongside Sapphire and Scale and Vintage and Bell Capital. Actually, most of our investors joined this round again.
Shimel: Excellent. Excellent, excellent, excellent. So Shlomi, you know, beyond the big number, talk to us a little bit about what does it mean for JFrog?
Ben Haim: Well that’s a good question because we were in this place when the company’s doing great and you are very – you are going very fast and very efficiently and the market is going, so it’s not just your business, it’s the whole market, the whole DevOps market is booming, and the fruits of our labors were something that we felt every day with all of our six products. And just three months ago we released a platform, the Enterprise Plus JFrog platform, which is an end-to-end solution to all kinds of binary, and we knew that this is the right timing to go big on the market and take it down because JFrog – as people are telling us, JFrog is everywhere. It’s about to be the standout of the DevOps industry. And now that we are planning some big things to the market we needed to support that with the right amount of funds and to build a great company.
Shimel: Sure. And, you know, Shlomi, we just spoke last week; you guys had acquired a company that was gonna help with delivering DevOps professional services, Trainologic. You’ve expanded all over the world, obviously, or are expanding, but really this brings a whole different scale to the equation, you know? We’re not talking about just opening outposts; with this kind of, you know, capital you can afford to make some major bets, right? Where do you see sort of major bets being made, major moves being made? Not just geographically, Shlomi, but in terms of focus areas?
Ben Haim: Yeah. So Ana and I will humbly say that we have raised the highest amount in the DevOps history, not just to create the news item but to create history. So JFrog’s vision is to make sure that software updates become liquid. Software updates should run like water in pipes. And with the product alignment that we got to, with the Enterprise Plus release, now that we have an end-to-end solution with the universal DevOps that keeps the freedom of choice in the hands of the developers, we are certain that this, alongside the presence we have in the market – we have over 4,500 customers – we are positive that JFrog will be the company or at least have the potential to be the company behind all the software updates in the world.
And this is the real pain of DevOps, this is what DevOps is trying to solve; we are trying to get software from A to B, and JFrog is following all the edges and support this binary flow and software distribution within our customer’s data centers and different sides. So I think that with this vision, to be the company behind all the software updates in the world, you have to dream big, you have to build big, you have to expand. You have to expand not just geographically as you mentioned, you have to expand with technology so you will be able to support whatever needs that will be raised, and you also have to take it seriously. It comes with a lot of responsibility.
Shimel: It sure does, it sure does. Shlomi, you know, they say a rising tide lifts all boats, and certainly, you know, look, we saw in the last – just this past month, GitLab raised $100 million round and $1 billion-plus valuation. We saw GitHub not that long ago purchased for $7 billion from Microsoft. And now we see JFrog with $165 million raised. What does this mean for the DevOps market in general, right? What does this mean for the DevOps market I mean for other companies and stuff like that?
Ben Haim: Well, you and I still remember the days that DevOps was not even a term, right? And of course there was no budget line called DevOps. So I think that the industry realized and acknowledged the fact that the biggest challenge is not the challenge of software; it’s the challenge of fast. We have to do things fast and we have to combine the human power with the machine power, and this is what DevOps is all about. You are right; this year was an amazing year for companies in this domain. So GitLab I think raised this $100 million last month, but these started with Xebia and then Mesosphere and then Sonatype and GitLab and of course the giant acquisition of GitHub, which I’m not sure if it’s DevOps or dev, but in any ways, same neighborhood. And this is exactly what I’m talking about.
The world belongs to those who are pushing software from build to production and we are all as consumers expect software to be up-to-date at any place, anytime in a secure way, and this is what we are doing. This is JFrog’s mission, and I think that VCs acknowledge that. I think that the market acknowledge that. I think that if you’re looking at Atlassian, which is for me the best example of building something big in the world of software infrastructure, if you look at their market cap we all see the same sign and the sign says this is going to be a big market.
Shimel: Yeah. It’s a huge market. So Shlomi, you know, with this kind of raise, we also have the opportunity to maybe move out of the comfort zone. So this is an entrepreneurial dilemma; do you double down on what you’re doing, doing well and do it better, or do you look to maybe in adjacent areas or that blend in nicely with what you’re doing now but expand the offering? You know, you drive the vision. You know, it’s tempting but also discipline requires focus on what you do well. What do you think about that?
Ben Haim: I think that it’s maybe the most popular entrepreneurial dilemma, but one very smart investor told me once, “I’m not here to invest in what he did; I am here to invest in what you’re going to do together with me.” And I’m still taking this very important sentence very seriously. We built a great business and a very solid business with awesome foundation and I think, Alan, you know that, the market knows that and, you know, giant companies are investing in JFrog every day. We are growing at a pace of 100 new logos as month, so we are very honored and very pleased to see that what we have created is growing, but it’s not even the tip of the iceberg. The whole idea of pushing software from the development machine to whatever edge is a big mission because it comes with high availability and it comes with a universal solution and it comes with security and it comes with automation and scheduling.
And you start to see the consolidation in the DevOps market; people start to understand that you need a code repository – this is a very important piece – and you need an artifact repository – and this is a very important piece – and on top of those two you start to build the layers of DevOps. So we are taking this field by field and layer by layer, but it’s just the tip of the iceberg. We will follow any edge and I think that it’s just the beginning. We didn’t even start to think about DevOps for IoT, which will also be a big thing five years from now.
Shimel: I think maybe even before five years.
Ben Haim: I agree with you, yeah.
Shimel: So let me turn it another direction. You know, one of the things I personally admire about JFrog is the culture that you and the team have built there. It’s great, it’s exciting, it’s energized. I can only imagine the buzz internally as a company around the race. Why don’t you share with our audience a little bit of insight. How has the team there reacted to the news?
Ben Haim: So, Alan, I – you touch [laughs] the very special, you know, spot in my heart when you speak about our team. I always thought that it’s great to build a company of 50 people or 100 people because you can preserve the culture, but now we are over 400 people and some of the folks are, you know, a result of M&A and acquisitions that other companies – great companies that joined us, and still we can protect what we call the JFrog codex and our culture and I’m very, very pleased to see it. Obviously, we didn’t share it yet with all the folks – we are going to do it on the third, on Wednesday – but we shared it with all the management, different tiers of the management.
The excitement is through the roof mainly because of the fact that everyone that walks in JFrog – you know what, not everyone – but 90 percent of whoever walks into JFrog is so humble and, you know, so focused on the day-to-day mission, and when something like this is happening it’s just – you know, it’s more than shocking news. It’s going to the mirror and look at the reflection and say, hey, we did something great and we built it together. And we say in JFrog, once we leap forward you won’t go back, but it’s not about that. It’s about once you leap forward together with your team you won’t go back, and I think that this is the significance of JFrog.
Shimel: Excellent, excellent. Shlomi, also – look, you spend most of your time I know now in the states, but JFrog is originally an Israeli company. This has also gotta be big news in Israel I would imagine. I don’t know if an Israeli company – I mean Israeli companies have had big exits, but this kind of raise, and you’re talking to us today from Israel. Can you give us a sense on that, of what does it mean within the Israeli tech industry, which is, you know, such a hot, hot space, but this has got to, you know, make some noise there, right?
Ben Haim: Yeah, absolutely. Well this is – you know, these are big numbers for any market, like I don’t know any other company in the landscape of DevOps that’s raised this amount and with these great partners, so I think it’s big news everywhere, but yes, you’re very correct. And, you know, the Israeli market, it will be a big news item, though there are companies in Israel that raised about $100 million, some of them even above $200 million, but there is something very interesting happening in the industry, the high tech industry in Israel. We were used to known for our technology, you know, the Israeli technologies and all the startups booming in this very small country, and then for products – so you heard about companies like Waze and so on – and now I see more and more Israeli entrepreneurs that are daring to dream big and to say “I’m going to build my own company to be public and to last forever,” and to stay there and not just in the next five years and then get bought by one of the giants, but it’s going to stay relevant for the rest of the years. And I see more and more Israeli founders thinking that way, raising money from late-stage funds, raising money with an IPO in mind – you know what? Not as a goal but as a milestone. It’s something that will structure the company to be bigger and better. And I’m very excited to be part of this industry as well.
Shimel: Absolutely, and you should be. So Shlomi, right there, I gotta ask; is that – is an IPO versus an acquisition the goal, the end game here or you’ll take that as it comes?
Ben Haim: You know, we think about the next act. For us, IPO is a very important milestone. It’s another way to raise money; to spend not from the funds but from the public, but it’s something that we’re looking at. Jacob Shulman, our CFO, joined us from Mellanox, which is a public company. We know what we are doing but it’s a milestone. If you ask me what is my biggest challenge, I want JFrog to be able to cross the $1 billion threshold before 2025. This is a very, very long run goal but, well, we are already at 10 years old JFrog so you can bet on us, keep your eyes open, and we will make it happen.
Shimel: Excellent. All right. Shlomi, we’re about out of time, but let me again say congratulations, mazel tov; just a real accomplishment here. But you know what? One thing I’ve learned with raising money, Shlomi, is it’s not anyone does you a favor. People don’t give you money ’cause you’re a nice guy or they want – you know, they do it because they see a way to make more money. So to me this represents more than anything a tremendous vote of confidence in what you’re doing there and what the potential return on investment is, right? So for that alone, really hats off to you and the team. I wish JFrog, you know, and you and the team fantastic success going forward. We’re all gonna be watching. Make us proud. And thanks for talking to us today.
Ben Haim: Thank you so much, Alan. I really appreciate what you do for us and what you do for the DevOps industry. It’s not taken for granted. Thank you so much for all your time and for giving me the opportunity –
Shimel: Yeah, my pleasure.
Ben Haim: – to speak about this again. Thank you.
Shimel: We will for sure. Shlomi Ben Haim, co-founder, CEO, JFrog just announced $165 million round led by Insight Venture Partners. Fantastic news. This is Alan Shimel for DevOps.com. You’ve just listened to another DevOps Chat. Have a great day.