Automation for DevOps firm Chef has today closed a $40 million Series E funding round led by DFJ Growth.
Investors included Millennium Technology Value Partners, Battery Ventures, Citi Ventures, DFJ, Ignition Partners, ScaleVP and HP Ventures.
Speaking to CBR’s Joao Lima, Jay Wampold, marketing VP at Chef, talked about the round and the company’s secret plans for the DevOps revolution.
CBR: What is the importance of having DFJ Growth on board with your funding?
JW: The lead investor was DFJ Growth. What is interesting about DFJ Growth is that one of our initial investors was DFJ Ventures. DFJ Growth and DFJ Ventures are a completely different fund, and it is fairly rare to have both investing in a company. When that does happen, it leads to good outcomes.
The other companies that have DFJ Growth and DFJ Ventures [has funders] are Tesla, SpaceX and Box. We refer to this as "DFJ double dip". The round includes our existing investors, but DFJ Growth is leading the new round.
CBR: How much has DFJ invested on its own?
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JW: We are not breaking out specifics on the round, but of all the investors DFJ hold the lion’s hsare of the $40 million invested.
CBR: What are the implications of the "DFJ double dip" on Chef’s worldwide strategy?
JW: The fact DFJ Growth and DFJ Ventures have invested puts a spotlight on our success to date. Our revenues are growing rapidly.
We are now getting into a scale; our growth rate is accelerating as we get larger. We are in a unique place where demand for DevOp solutions has becomes so high, that we are in place to take advantage of that demand.
CBR: Does this funding round prove DevOps are here to stay?
JW: Yes, 100%. The trend of the moment that we are talking about is that every business is going to become a software business up to a certain degree.
Traditionally, IT was a back office support function to the internal operations of the business. Now the role of IT is to actually be the front door to how they deliver value to customers. That is a fundamental shift.
DevOps has become a label, the market definition for the journey that every company is on to become software led.
CBR: What do you plan to do with the money raised from the funding?
JW: Part of the money we raise is going to go into research and development (R&D) and we have some very ambitious plans there. We will be in a position to talk about them in three to five months.
We are going to be strategic and look at acquisitions if they make sense to us; we are working on some interesting R&D projects, and continuing to scale out the company.
CBR: What plans do you have in terms of market investment?
JW: We continue to invest in North America and we are making big investments in EMEA. In particular we are expanding our operations in the UK, Germany, in the Nordic region. The volume of demand of Chef in Europe is increasing significantly. We have been doubling the operation in Europe, including the UK.
We have a presence and early customers in South Africa. We have seen a lot of interest and closed some deals in Asia, I would expect that we start building operations over there as well.
We will continue to invest in geographies where we see strong traction both in the open source footprint as well as demand for DevOps.
CBR: How would you sell the "DevOps idea" to a new customer?
JW: Devops is actually the cultural side of developing a high velocity business. Essentially, if they are looking to do that, it is really adopting the patterns of practices of any of the big web innovators that created this whole approach.
For example, we have retail customers like Target or Nordstrom. Their biggest threat was not competing with like-retailers. They were eventually competing with Amazon. Amazon has mastered the art of delivering value and product business services through digital.
The question is not whether an enterprise customer comes to us asking "should I adopt DevOps?", they now understand they want to become a high velocity software driven business.
The challenge is that they do not know how to do it, and they are also straddled with an operation chasm between where they are today and where they need to be. That operation chasm includes legacy infrastructure, regulatory requirements and a need to develop the skill base of their IT practitioners.
What they are looking for is a partner to help them through that journey. It is our believe that in order to be effective, they have to change the workflow, the culture, the operating model on how they work with the company.
CBR: What differentiates you from your competitors?
JW: Three things: demonstrate success to customers; chef is the better platform; and go to market partnerships. We become almost a de facto choice for customers.
