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Hello friends! Happy weekend. Up top, there’s an extra Equity episode dropping today digging into the larger China-Microsoft dustup over LinkedIn. So if you need more on that, it’s coming. Let’s go!
The key money story in Startup Land this week was the simply massive GitLab IPO.
In case you are behind, GitLab filed to go public, and we noted that at current market prices, the DevOps giant could be worth some $10 billion. That wound up being conservative. GitLab wound up raising its IPO price range far above its initial estimate and then pricing at $77. Late Friday afternoon, as I write to you, it’s worth more than $108 per share.
I got on the horn with GitLab CEO Sid Sijbrandij to chat about the deal. I’ve nattered with Sijbrandij here and there for some time, starting back with this particular story. So it was good fun to talk to him on IPO day, constrained as he was by normal SEC rules. Here’s what I learned:
- Why did GitLab go public now? It hit all the marks, Sijbrandij said, including revenue scale, revenue predictability and compliance. And the IPO date wound up being 10 years to the month from when co-founder Dmitriy Zaporozhets wrote his first code for the company. So that’s a nice circle of timing. Humans do so love round numbers.
- Did GitLab’s strong net retention metrics help with revenue predictability? Yes, but Sijbrandij didn’t want to say that explicitly.
- Open-source is now an advantage, not a hindrance: This point is an echo of something we noted concerning startups the other month, but it’s worth flagging all the same. Having open-source code is now a boon to companies hoping to build long-term relationships with developers, something that is often key when it comes to product-led growth, I’d hazard. This is the polar opposite of the world that existed a decade ago, and is perhaps why Microsoft changed its tune some time back on the concept of open code.
- And will we see GitLab get into MLOps as well as DevOps? Maybe? Sijbrandij wasn’t black-and-white on the matter, but with the MLOps world accelerating, I wouldn’t be shocked if we saw GitLab wander into what could be called startup territory in time. It certainly now has the cash to do whatever it wants.
Cloudflare versus the world
Let’s dive back to the news from late September that Cloudflare was moving into the “storage as a service” market. The news was that Cloudflare intends to offer cloud storage through its collection of global data centers. The product news was far afield from what Cloudflare is best known for, namely making websites appear more quickly and more securely.
Why was the now-public company getting into something as commodified as storage? At the time, Ron Miller wrote that Cloudflare was turning something it built for itself and offering it to others. And that by eliminating some fees, Cloudflare’s storage service – R2 – would be cheaper than what Amazon offers, for example, via its AWS collection of infra services.
I have had a thought. Namely, I will not be utterly gobsmacked if we see large, but not titanic, tech companies with a global footprint that offer a particular flavor of digital service also get into providing what appear to be initially niche infra tooling that competes modestly – at first – with what Amazon and Microsoft currently offer via AWS and Azure.
This may be Big Dumb, but we can explain ourselves a bit by analogy. My argument is akin to how Intel ran the world with its particular CPU methodology for a long time, only to lose the future to not only GPUs forced into the cryptocurrency salt mines, but also a grip of startups building, say, AI-tuned silicon. In our analogy, AWS is Intel and AI chips are things like R2 from Cloudflare.
The days when AWS and Azure were trading price cuts back and forth is behind us. What’s next?
Odds, ends
- A mix of Midwest VCs put $3.5 million into Presidio, a digital vault startup aimed at consumers. It’s a Florida-based company, and is looking toward a 2022 launch. I have myriad questions about this. But that someone is building a storage-centric startup in this time and era caught my eye.
- Cap table software company Carta put out a data product that I have enjoyed tinkering with. If you want to mess about with a host of funding data sortable by era and company type, it’s good fun.
- I was going to write up notes on this essay from a U.K. startup about how it is redomiciling to the EU after its home country started to change privacy rules, but our own Natasha Lomas beat me to it. So read her post, which is better than what I could have come up with.
- And, speaking of the U.K., Freetrade in the country has now signed up 1 million users. This stat matters as it indicates that the Robinhood boom is truly an international consumer movement that will lift many startups’ boats.
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