DigitalOcean, which describes itself as “the cloud for developing modern apps,” announced today that it has raised a $50 million Series C at a valuation of $1.15 billion.
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Access Industries led the financing, which included participation from Andresseen Horowitz (a16z). It comes on the heels of a $320 million debt financing in February, and brings DigitalOcean’s total venture and debt raised to $493 million since its 2012 inception.
The New York-based company said the COVID-19 pandemic has accelerated the transition of businesses to the cloud.
So what does DigitalOcean do exactly? The company says it delivers “an affordable and simpler alternative to the enterprise cloud giants.” It now has more than 500,000 customers globally, with nearly two-thirds located outside the U.S. They include TaskRabbit, StablePoint, and Snapt, among others.
Interestingly, DigitalOcean says the financing will help it maintain its “profitable growth rate” and help it meet a surge in demand from small and medium-sized businesses and developer teams. The company says it surpassed $300 million in annual recurring revenue (ARR) during this current quarter.
“We are now freed up to focus on accelerating revenue growth, transitioning to free cash flow profitability in 2020, and positioning our company ultimately to be a public company,” said DigitalOcean CEO Yancey Spruill. “We differentiate our service with an easy to understand set of options. Simplicity is embedded in our entire customer experience and that is attractive in this environment, and we are priced competitively to boot.”
Spruill told Crunchbase News via email that DigitalOcean has over 500 employees, up by 10 percent from a year ago.
Recently, DigitalOcean unveiled a new data center in San Francisco, bringing its total number of centers to 13.
The company says that its infrastructure and platform-as-a-service (IaaS and PaaS) solutions provide a “no DevOps required” experience, allowing developers to focus their energy on creating innovative software.
“By combining the power of simplicity, love for the developer community, an obsession for customer service, and the advantages of open source, DigitalOcean brings software development within technical and economic reach of anyone around the world,” the company says.
In a written statement, Access Industries Managing Director Pueo Keffer said his firm remains “extremely impressed” with DigitalOcean and its management.
“[We] believe that both are well positioned to transform the cloud space for developers and SMBs in the years ahead,” he added.
Illustration: Li-Anne Dias