World

GitLab is worth twice the amount Microsoft paid to GitHub

People celebrate the Gitlab IPO at Nasdaq on October 14, 2021.

Source: Nasdaq

October 9, 2017, GitLab $ 20 Million Fundraising Round Led by Alphabet’s GV, formerly known as Google Venture.The news hit as the bigger rival GitHub was about to launch Annual developer meeting..

It was just one example of a small start-up that was trying to get the attention of its more established rivals.

More than a year ago, on September 13, 2016, GitLab Round Headed by August Capital.A GitHub developer event called Universe has begun next morning..

In the code collaboration market, GitLab grew up behind GitHub.Both companies were built on top of open source software GitIt was started by Linux author Linus Torvalds as a way for software developers to share code and collaborate from different locations.

GitHub was founded in 2008. Four years later, GitHub $ 100 million from Andreessen Horowitz, Mammoth round at that time. GitLab was launched around the time of its funding.

In early 2015, CEO Sid Sijbrandij checked the name of GitHub three times after GitLab completed a three-month mission in the Y Combinator accelerator program. 2-minute presentation On YC Demo Day.

“Competition GitHub has 270 employees. GitLab has 800 contributors,” he said, promoting his company’s open source goodwill. “That’s why GitHub Enterprise is catching up with our feature set.”

At that time, GitHub had little reason to sweat. With GitLab’s annual revenue of only $ 1 million, GitHub was not only backed by Andreessen, but was scheduled to withdraw soon. Another $ 250 million In a round led by Sequoia.

However, the cultural flaws on GitHub are: Julie Ann Holbus, Tweeted a long time in 2014 about top sexism. After some C-suite tweaks, the company continued to grow, but GitLab suddenly had the opportunity to take advantage of its unique culture.

GitLab was founded as a completely separate company with no headquarters or real estate. It was said that all employees around the world had equal access to information. GitLab has a vast range of features Online handbookCurrently consists of over 2,000 web pages, detailing how the company operates, from finance, engineering and marketing to employment, stock options, compensation and telecommuting.

The board meeting was held at Sijbrandij’s apartment in San Francisco’s South of Market district.

“We would all have been sitting around the table in his kitchen, and he had a cat in his bedroom and meowed to hang out,” he said. Dave Munichiello, A GV partner who became a board observer after leading the company’s investment in 2017.

Eventually, the board matched the rest of GitLab’s operations and became completely remote.

“Going to remote areas is the last aspect of the company, and the board is better than that,” Cybrandi said in an interview with Nasdaq on Thursday.

“Money to light”

In fact, the game was just beginning.

GitLab was better than its bigger rivals, Despite Microsoft’s large sales engine. It is also thriving against other major competitors, BitBucket. Atlassian..inside that Fundraising announcement In September 2019, GitLab said its annual revenue increased by 143%. Revenues for the year ended January 31 increased 87%.

Public investors are now rewarding that momentum.

GitLab debut It was one of the most anticipated software IPOs of the year at Nasdaq on Thursday. After a 49% rise in stock prices in the first two days, GitLab is valued at around $ 16.5 billion, more than double the 2018 GitHub acquisition price. Revenues in multiples of 71 are one of the highest of all software, well above Atlassian’s multiples. 45.

“The market loves rapid growth,” he said. Tomasz TunguzManaging Director of Redpoint Ventures, investing in software and infrastructure companies. His company is not involved in GitLab.

Tunguz said that even if GitHub was swallowed, GitLab showed that the DevOps world (a term for a combination of development and IT operations) wouldn’t work with the same rules as traditional software.

DevOps determines which tools developers will use. With so many free and low-priced products available through a simple cloud delivery model, software giants and their huge sales and marketing budgets don’t have much of an impact on their choices.

That’s why GitLab has built a set of tools that developers need in a package that companies can buy.

“GitLab felt the importance of enterprise sales much earlier in the life of the company,” said Tunguz.

Microsoft’s acquisition of GitHub offers GitLab two major opportunities. First, GitLab was able to remove the developers who were inherently distrustful of Microsoft and its anti-open source past.I’m the current CEO Satya Nadella Microsoft has emphasized adopting open source products that make sense to its customers. Microsoft has historically been far from open source and was a former CEO. Steve ballmer Once you call Linux “gun”

More importantly, GitLab can be advertised as a neutral service available to all public cloud providers, while GitHub is owned by the same company that manages Azure. This is the second largest cloud service below. Amazon Web service.

so Blog post With the title “Congratulations on Microsoft’s acquisition, GitHub,” GitLab pointed out exactly that.

“The long-term strategic implication seems to be that Microsoft wants to use GitHub as a way to drive Azure adoption,” the post said.

Microsoft Corp. Scott Guthrie, Executive Vice President of Cloud and Enterprise, will speak at the Microsoft Developers Build Conference on Monday, May 7, 2018 in Seattle, Washington, USA.

Grant Hinsley | Bloomberg | Getty Images

Sijbrandij said the market has been functioning as expected since the transaction.For example, earlier this year on GitHub Code space As a cloud-based developer environment on Azure.

For immigrant customers, Sijbrandij said UBS Sign on last year, Like most major financial institutions, banks will be “0 to 11,000 people at GitLab”, I use a lot of Microsoft product.

“Our customers attach great importance to our cloud independence,” says Sijbrandij. “All companies are becoming multi-cloud.”

Sijbrandij added that Amazon and Google sell GitLab tools, and their efforts “have intensified in the last few years.”

Bleeding cash

Still, GitLab has financial challenges. Even with the vast world of unpaid developers who have no real estate costs and help build features, it costs a lot of money to sell and market because it tries to turn free users into paid customers. Enhanced security and faster code review.

Revenue In the second quarter, net losses increased from $ 9.4 million to $ 40.2 million during the period, up 69% from the year-ago quarter to $ 58.1 million. Second-quarter sales and marketing costs reached three-quarters of revenue.

Cumulative losses over the last four quarters have exceeded $ 200 million. Prior to the IPO, GitLab’s balance sheet had only the equivalent of $ 276.3 million in cash.

Unlike GitHub, which operates within the cozy area of ​​Microsoft, which is rich in cash, GitLab needs external funding to sustain growth. In a report this week, research firm New Constructs, who is particularly skeptical about tech IPO valuations, said GitLab should be worth $ 770 million, or 95% lower than its current price. ..

“Microsoft is a cash-generating machine that can easily offer GitHub services for less than cost to gain market share and attract users to the Microsoft platform,” the company said. “GitLab’s reliance on one revenue stream, subscription, and license to the DevOps platform seeks to compete with profitable companies with many other revenue streams to support loss leaders. Therefore, it is a big competitive disadvantage. “

“Our main competitor is Microsoft Corporation after the acquisition of GitHub,” GitLab admits in its prospectus.

Sijbrandij certainly does not express concern as his company has hundreds of millions of additional capital to facilitate expansion and, for the first time, has liquid stocks that can be used to acquire small businesses.

GitLab CEO Sid Sijbrandij at a corporate event in London

GitLab

He advertises the benefits of GitLab’s complete DevOps platform and the ability for developers to use it as a central repository across projects.

“We were able to build something that would allow you to do everything, from planning what you make, making it, deploying it, and monitoring it.” Said Sijbrandij.

He states that the contrast with GitLab isn’t much different than it was six years ago when he left Y Combinator. GitHub hosts many open source projects, but the products it ships are closed and proprietary, and GitLab uses the so-called open core model to commercialize open source software.

Returning to GitLab’s early funding round, Sijbrandij did not explicitly confirm that his intention was to grab some of the spotlight during the GitHub developer conference. But he didn’t deny it either.

“When starting as a company, it’s very important to find a way to participate in the news cycle,” he said.

look: GitLab is published on Nasdaq

GitLab is worth twice the amount Microsoft paid to GitHub

Source link GitLab is worth twice the amount Microsoft paid to GitHub

Back to top button