Cloud computing startup Portainer, based at Hobsonville Point, has raised US$6 million in a Series A round that attracted one of Rocket Lab’s most prominent investors – who came knocking after the Kiwi startup popped up on its radar.
Chief executive and co-founder Neil Cresswell will use the funds to continue to take over the world – or at least the global market for managing “containers” – from the master-planned northwest Auckland community.
The round was led by Bessemer Ventures, the Silicon Valley VC fund that was one of Rocket Lab’s earliest investors.
It also included European firm Sonae Investment Management and Movac – the local VC fund that has recently had big wins with the $100m-plus sale of Auckland wireless charging startup PowerbyProxi to Apple, and point-of-sale software company Vend’s $500m sale to a US rival.
The raise follows a US$1.2m ($2.93m) seed round last year, taking Portainer’s total funding to just over NZ$10m since the firm was co-founded by Cresswell and French expat Anthony Lapenna in 2016.
The startup, which is in hiring mode, has just moved from The Hangar – the co-working space that sits atop of Little Creatures bar and brewery in a converted former Air Force hangar on the Hobsonville Point waterfront – to an immediately neighbouring building, also recently restored after its former Air Force life.
Portainer currently has 30 staff, 23 of whom are located in NZ. Cresswell sees 50 by year’s end.
The Westlake Boys’ old-boy and AUT engineering school alumnus lives in neighbouring Helensville. His recruiting effort has included a post on the Hobsonville Point community Facebook page, which resulted in the first of his new wave of hires.
“It’s still very hard in New Zealand to get people who deeply understand the technology that underpins Portainer,” Cresswell told the Herald.
“But in a way, Covid helped us as we have had an influx of talent returning to New Zealand.”
“Containers” exploded in popularity with the geek-set early last decade. The technology wraps an app, and everything needed to run it, inside a virtual container, allowing it to be run on a computer in your office, or via a server on a public cloud or a private cloud.
“Containers provide a way to deploy applications in a safe and secure manner, and that provides isolation between each application and the server they run on,” Cresswell said.
“This allows you, for instance, to have multiple versions of the same app running on the same server without conflict. Containers also let you easily distribute and scale components of your app across servers, giving better performance and reliability.”
Cresswell noted the technology was extremely useful, but also that although it started off simply enough, it could get very complicated very fast if someone was managing multiple containers spread across multiple data centres.
He and Lapenna set about creating Portainer, a graphical user interface that made it easier and faster to manage containers using already-popular container tools like Docker. Portainer, which is now being fleshed out into a “fully fledged” container-management platform, works with all of the largest cloud computing platforms, including Amazon’s AWS, Microsoft Azure, Google Cloud and IBM Cloud.
Portainer was created as a free open-source product, shared via Github – the popular portal and hangout for developers (that Microsoft bought for $11 billion in 2018, but which still operated independently).
“We released our first commercial product late December last year,” Cresswell said.
“We are targeting US$1m in contracted revenue this year, but expect to go faster than that.”
That seems very doable, given the free version of Portainer has garnered some 500,000 users worldwide. The more capable business version costs from US$350 (with 9-to-5 support) to US$850 (for 24/7 support) per licence per month, or US$4200 to US$10,200 for those who pay annually.
It was Portainer’s success on Github that caught Bessemer’s eye.
Github publishes various statistics around software’s popularity, and the US fund noticed that Portainer was getting a lot of “pulls” (or requests as people used it in the cloud).
Movac partner Lovina McMurchy told the Herald that such a data-driven approach has been on the rise during the “new-normal” of closed borders or limited travel – and she sees it as a positive for Kiwi contenders. “You don’t have to fly into the US,” she said. “It’s helped level the playing field.”
Beyond the Github analytics component, McMurchy said the $10m raise was something of a model deal for the pandemic era with its global partipation.
“The deal involved a US VC, a local VC, and a European VC,” she said. “None of us have ever met each other in person and the offshore guys have never met the founders in person.”
Under-appreciated at home
McMurchy added, “It’s also interesting in that we now have a leading company in containerisation tools in our country when very few of our local corporates understand or use containers. It’s quite remarkable.”
When will Portainer break into the black?
“Profit is not currently part of our equation as we are focused on growth and product development. It’s a highly active space and we need to get every advantage we can both in product and market share,” Cresswell said.
“Our investors are adamant that growth at this stage is the number one goal.”
That shareholder-driven mandate notwithstanding, Cresswell says the free, entry-level version of his company’s product will remain. It’s base includes a lot of home users, whom the cofounder describes a “gold” because of the candid feedback they provide.
“We’ll continue to invest heavily in the free open source version of Portainer, with 80 per cent of all features going in there. Portainer Business – our commercial verson – will have the 20 per cent of features specifically requested by commercial users.”
But while Cresswell is keen to reassure the geek-set that Portainer won’t lose its open source credit, he also acknowledges it’s moving into a wide world.
Portainer’s new recruitment drive goes beyond software engineering.
“We also are hiring sales and marketing to help us expand brand awareness and sales of our commercial offering, and continuing to expand our support team so we can give an awesome experience to our users, free and paid,” he said.
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