June 20th, 2014
In case you missed it: Puppet Labs raised an additional $40 million, this week
You’ve probably already heard, but just in case you haven’t… Portland’s Puppet Labs has raised another $40 million in venture capital, increasing its total funding to $86 million. More important than the number, though—albeit impressive—is the fact that previous investors have participated in this round. A sign of their confidence in the company and its potential for growth.
Today I’m happy to announce the close of a $40 million funding round, all with existing investors Cisco, Google Ventures, Kleiner Perkins Caufield & Byers, Triangle Peak Partners, True Ventures and VMware. This round will enable us to continue investing aggressively in great technology and products across a wider swath of the market.
In addition to this funding round, Puppet Labs also announced that Mukesh Sharma has joined the team as vice president of sales, EMEA, to expand support for its growing customer, partner and developer communities throughout the world. Prior to joining Puppet Labs, Sharma was the COO of Canopy, a cloud service provider, where he focused on delivering operational excellence to help accelerate deployments and ensuring customers meet their business goals. Mukesh was also responsible for building pre-sales and product development organizations, while also developing the global sales go-to-market. Mukesh joined Canopy from EMC where he was responsible for building and running the Virtualization & Cloud business unit across Europe, Middle-East and Africa.
Needless to say, the news got a bunch of pickup. Here’s what others are saying.
This should be the last round of funding before Puppet Labs makes a go in the public markets as the company should be cash-flow positive in late 2015, said Puppet Labs CFO Bill Koefoed.
But Puppet has a competitive lead at the moment, at least if you ask Bill Koefoed, the company’s chief financial officer.
“You could probably fit all of our competitors together, and they’re probably not half our size,” Koefoed told VentureBeat.
And Puppet wants to maintain that lead. The company wants to become better skilled in managing networking and storage resources, not just computing gear, Koefoed said.
Puppet Labs has come a long way since first opening for business in 2005, in Tennessee, where Kanies’ wife was attending graduate school (it’s now headquartered in Portland, Oregon, where it moved in 2009).
Puppet Labs started out as a self-funded operation at a time when seed funding was not as commonplace as it is today, even less so outside of the tech-venture-friendly avenues of Silicon Valley.
“For the first three years it was just me doing everything from sales and marketing to product. I was ‘ramen profitable,’” he says. Eventually he was “completely tapped out” from his bootstrapping ways and admits he may have limited the company’s growth as a result. So he brought in two more people, and in 2009 took its first funding, from True Ventures. “It was small but enough to hire a revenue head,” he says.
Data Center Knowledge: Puppet Labs Raises $40M to Grow DevOps IT Automation Biz
Puppet is riding the wave of DevOps in the enterprise. DevOps combines many of the roles of systems administrators and developers, and enterprises look to it to add some agility and automation. Based on open source architecture, Puppet saw amazing adoption since its inception in 2005, but it didn’t commercialize it until about three years ago.
It has added more than 500 enterprise users since then. The Puppet Enterprise product automates the configuration and deployment of virtual servers is targeted at streamlining the workload of IT system administrators.
Existing investors — Cisco, Google Ventures, Kleiner Perkins Caufield & Byers, Triangle Peak Partners, True Ventures and VMware — led the deal. Total funding now stands at $86 million since 2009, making it one of the most heavily-funded Portland area startups.
“Puppet Labs is growing fast for a reason: IT automation is critical for any company that uses software to compete,” said Luke Kanies, founder and CEO of Puppet Labs, in a release. “Today, we help more than 18,000 organizations automate IT, both on premise and in the cloud. But we’re just getting started. This funding round enables us to further our leadership position by entering new markets and helping our customers deliver great software faster than ever.”
Already among Oregon’s best-funded young tech businesses, Puppet’s total haul is $86 million after the latest round. It says it will spend the new money to ramp up hiring and fill its big new downtown headquarters, as well as expand a fledgling outpost in Europe.
“We want to be a $100 million company, but we don’t want to stop there,” said Puppet chief financial officer Bill Koefoed, whom the company hired away from Microsoft last fall. “We want to be a billion dollar company.”
Portland Business Journal: Puppet Labs raises $40M, plans more hires
Puppet is one of the hot Portland companies that the community is watching with the expectation there could be an IPO in the mix. Koefoed didn’t comment on any IPO plans directly but said the company has a plan in place to hit profitability and has always been focused on building a sustainable enterprise that people want to work for.
“We are getting this cash because we are making investment but in the next couple years we have a time line to be cash flow positive,” he said.