Coder, an Austin startup that is building a cloud-based development suite, has raised $4.5 million in seed funding co-led by Uncork Capital and Redpoint Ventures.
This raise is a little different than most. For one, it was raised by a trio of 20-year-olds—John A. Entwistle, Kyle Carberry, and Ammar Bandukwala—who had worked together for seven years. And they raised the money by “cold emailing” potential funders. Founders Fund, Austin-based Capital Factory, and some individual investors also participated in the financing.
Young To Fund
Entwistle first met his co-founders when he was 13 and running a small game server company out of his parents’ home in New York. At one point, he decided he needed to hire an engineer and connected with Carberry, who lived in Saskatoon, Canada, and also happened to be 13. The two teens clicked and began working together.
“We had more users, and after about three to four months, we were generating $10,000 a month in revenue, and as kids, we got extremely excited about everything,” Entwistle told Crunchbase News. “As things continued to grow, we realized we needed a system architect to manage all the servers.”
A few Skype conversations later, and the young pair had hired 12-year-old Bandukwala out of Alabama to join their efforts.
“Over the next several years we evolved from building game servers to building DDOS mitigation platforms, one million-plus monthly visitor websites, and peer-to-peer file sharing companies,” Entwistle recalls. “We were spending 12 hours a day on skype calls trying to build something great. That’s how we spent our childhood. That was our lives.”
In the process of creating the companies, websites, and platforms, the trio began to ask themselves why they were writing code on their local computers when all their spec sheets, repositories, and products lived in the cloud.
“The idea of ‘Google Docs’ for code wasn’t a new one, but we knew that if we didn’t want to use existing solutions, there must be a better way,” Entwistle said.
So immediately upon graduating from high school in 2016, the three set out to build Coder. They considered basing their company out of New York or California but decided both places were simply “super expensive.”
After a visit to Austin, Texas, Entwistle was convinced of the city’s potential.
“I originally was thinking it would be a cheap, cool place to build a company,” Entwistle told Crunchbase News. “But I quickly learned that it has such a culture of building—the people, the change and everything going on. I have such confidence that we’re always working when our competition is probably asleep. The original motivation was financially-related, but I realized once I got here that the culture was unbeatable. So we all packed up our things and signed a lease on a rusty tin shack in East Austin.”
About six months ago, the company moved across the street into a 4,000-square foot facility. In September, Coder unveiled its public alpha release. This week, it launched its store. The company has one patent and another in the works, according to Entwistle.
“Simply put, Coder is a product and a community built by developers for developers,” Entwistle said.
But building a community and a product costs money, and raising venture capital, he conceded, was intimidating and “extremely foreign.”
“Our goal was initially to not need it,” he told Crunchbase News. “But we had underestimated how large of a task we were taking on. Once we realized we would need to raise venture capital, we started doing research, reading books, and just networked. I started emailing partners to tell them what we were building, and some of those emails weren’t exactly pretty.”
But they worked. In the end, Entwistle said Coder “had its choice” of investors to work with.
“During the funding process, we talked with the CTOs of several companies and they got so excited about the potential of having their engineers saving hours a month by our accelerating the computational process or providing analytics,” Entwistle told Crunchbase News. “Some of them became so enamored with the potential they ended up becoming investors as well.”
Andy McLoughlin, partner at San Francisco-based Uncork Capital, admitted cold emails “usually very rarely leads to investments.” Still, McLoughlin was impressed with what he received from Entwistle.
“These guys sent me an incredible cold email saying they had been the customer of one of my other investments, and said they were wondering who was the kind of investor that would back a company like that since it was analogous to what they were doing,” McLoughlin told Crunchbase News. “The materials attached were fantastic and incredibly compelling. I jumped on a call with them that evening. They sounded great and I asked my partner, Jeff [Clavier], to chat with them the next day because it sounded a little too good to be true.”
One week later, after making reference calls, McLoughlin flew to Austin to see the company on the premise that “the way software will be created in the future is not necessarily the way it is created today.”
“I think this is a very unique business, and the fact they’ve been able to build great products, with a lean and terrific team of very talented people in a place where the cost of living is so much lower is a real advantage,” McLoughlin told Crunchbase News. “The speed, efficiency, and quality of what they put out is absolutely unreal.”
The co-founders’ youth also gives them an advantage, McLoughlin believes.
“What they’re building is not a small, nichey solution,” he added. “They’re trying to re-architect the way software is created. That’s a big, audacious goal.”
Looking ahead, the company’s immediate goal is to tackle the space of integration into an engineers’ local environment. Down the line, they want to move into the enterprise space.
It’s not every day you see such young people making headlines for starting tech companies and raising millions in funding.
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