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Interface21 (Spring) gets 10M VC Funding

by Floyd Marinescu on May 10, 2007 |
Interface21, the company that develops and supports Spring has announced that it has received $10 million in Series A financing from Benchmark Capital. The new funds will be used to accelerate product development and expand marketing, sales and support infrastructure to scale their professional open source offerings around Spring and related products. InfoQ did an exclusive video interview with Rod to find out more.  Rod explained why funding, why now:
We have grown steadily over the last 2-3 years, and we are profitable, but we've reached a point where we realise that we want to do more, faster. We need to recruit more rapidly than we can do in a self funding manner, to meet demand, and we need to grow our support business more rapidly. That business has longer sales cycles than training or consulting, so it's hard to ramp it up as rapidly as we want and remain cash flow positive.
Are there any changes that we can expect to see? Rod answered:
I think the biggest change you will see is an increase in our investment in the Spring Portfolio. Looking from the outside, with Spring 2.0, Spring 2.1, Spring OSGi, Spring Web Flow, the new Spring Batch and the other portfolio projects charging along, I'm sure our pace of development looks pretty impressive. But inside, we are convinced that we can do even more, and even more quickly. That requires increased and dedicated investment on product development.

We are also planning to grow our sales and marketing capability. Currently Interface21 has NO dedicated marketing, and only one full-time sales person in the entire company. It's amazing that we have grown at the rate that we have, but, as a product company, we clearly need to invest more in these areas.

We have an established culture inside Interface21--based on values from the Spring Framework project itself--and Benchmark are investing partly because they value that. When you invest in a company that has been around for almost 3 years, and has significant revenue, it's not like investing in a pre-revenue startup. You're investing in something you believe in, rather than trying to create something new.

Everyone at Interface21 is really excited about this. Everyone is passionate about our technology (including those people who don't actually write code) and this is the right choice to put our technology first.
Benchmark partner Peter Fenton was a key figure behind the investment. Peter was also responsible for the investment in JBoss years ago. According to Peter:
very few open source projects rise above the noise to achieve critical mass, and even fewer drive fundamental product innovations.  Interface21 and its Spring Framework possess extremely rare qualities that we believe will lead to open source success—near ubiquitous adoption, a profitable business model, and a compelling vision that delivers innovative offerings to the enterprise.
Rod also talked about Benchmark as an open source VC and Peter's role:
Benchmark Capital have a great track record, and are probably the premier open source investor, with investments including Red Hat, MySQL and Zimbra. Peter Fenton, the partner who is investing in Interface21, was also one of the investors at JBoss, when he was at Accel Partners. Peter was on the JBoss board, but he has no involvement with JBoss or Red Hat today. Of course they are different businesses, but that means Peter has had a lot of exposure to open source business models. Kevin Harvey, another Benchmark partner, is on the MySQL board.

One of the major advantages of a top tier VC firm is the experience they bring. Peter was also very involved with Wily Technology, for example. Although that was a closed source business, it sold to the same large enterprise segment that we do, and had a similar position in being independent of the major vendors that it partnered with.
At JavaOne Spring also released Spring 2.1, Spring Weblflow 1.1, a partnership with Structure101, and Spring Batch. Oracle at the show also announced special tooling for Spring.

Editors note: Updated on May 14th, replaced video with a more detailed textual interview.

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Spring Enterprise by Corby Page

If anyone had the ability to grow organically, I thought Interface21 did.

VC don't give you money unless they're going to grow you 20X. I am very concerned about seeing an explosion of Spring subprojects that lack the quality or the relevance of Spring core.

And VC don't give you money unless you're going to cash out. I don't see Interface21 operating as a standalone IPO, so that means they will be actively seeking acquisition. I hate to see one of the big guys get ahold of this very independent entity.

I wish the Interface21 folks great financial success, but I hope Spring does not turn into a bloated, slow-release monster. I have already heard rumors that Benchmark Capital is pressuring Rod Johnson to change his name to something more kid-friendly.

Re: Spring Enterprise by info quack

If I could sugggest... please spend some of the money on adding some documentation to the Spring Rich Client Project. Or remove it from the Spring family entirely... thanks

Re: Spring Enterprise by Rod Johnson

Corby

And VC don't give you money unless you're going to cash out. I don't see Interface21 operating as a standalone IPO, so that means they will be actively seeking acquisition. I hate to see one of the big guys get ahold of this very independent entity.

On the contrary--raising venture money indicates our intention of growing a larger independent business. Top tier VCs do not invest in companies that are seeking a quick sale.

I am very concerned about seeing an explosion of Spring subprojects that lack the quality or the relevance of Spring core.

We are absolutely committed to maintaining our quality standards. They are key to the value of our business. Through increasing our ability to invest in product development, we are further guaranteeing our ability to keep up our high standards.

Rgds
Rod

Congrats! by James Strachan

Congrats guys! Keep up the good work.

James
Iona
Open Source the Enterprise Way

Re: Spring Enterprise by Corby Page

On the contrary--raising venture money indicates our intention of growing a larger independent business. Top tier VCs do not invest in companies that are seeking a quick sale.


Not a quick sale, to be sure, but definitely a sale. I'm sure that Benchmark has a great appreciation and understanding of what a terrific business you built, but they did not give you $10 million so they could sit back and admire it.

Anyway, I certainly trust your instincts, so I hope this all plays out well.

re: Peter Fenton by douglas dooley

I mean good call on the JBoss investment, and surely you recognize that I21 needs an enterprise-like support structure to even get in the convo., but can someone explain to me how a development framework has a revenue model? I am all pro-Java, like to see diversity of options, good for technologists, blah blah blah...but what I would like to know is how this makes money...

In my mind, it is not a foolish investment to make because Spring is coveted in the long-sought-after prize of wrestling away control from Sun, so there are acquisition opportunities, but without an IPO model, can it be expected that Oracle or BEA will spend $200M + to get something that is replacable...am I missing something?

I don't want to be the naysayer here, so I'll refrain from pointing out that ubiquity requires deployment not just development, and therefore, congrats to whoever is getting hired after this investment, you can thank Benchmark for trying to re-create the JBoss magic. Maybe there is a model for JEE firms to become VC-ready...

I just don't see how this one makes money...

Re: Spring Enterprise by Richard L. Burton III

Now the real question is when will you hire me? Then again, I recall at the Google Syg in NYC, you're moving to CA. Congrats on the VC Funding.

Best Regards,
Richard L. Burton III

Congrats!! by anjan bacchu

Hi There,

Guys, Congrats!

JBoss was the first in the java oss world. I look forward to seeing where the java oss world is heading.

BR,
~A

what does this have to do with Sun? by Cameron Purdy

In my mind, it is not a foolish investment to make because Spring is coveted in the long-sought-after prize of wrestling away control from Sun ..


Douglas, Sun is open-sourcing Java and the various standards at an impressive rate, and has opened up broadly to involvement from its partners and its competitors. No one is "wrestling" anything from Sun.

Peace,

Cameron Purdy
Tangosol Coherence: The Java Data Grid

Re: Congrats!! by Cameron Purdy

JBoss was the first in the java oss world. I look forward to seeing where the java oss world is heading.


There was lots of open source Java before JBoss, and it was often much more "open" ;-)

What JBoss did was commercialize Java open source and show that there was money to be made there, at the least for savvy investors. There is no doubt that the $10mm that i21 raised is directly attributable to the success that the JBoss VCs had, but it is no less attributable to the success of Spring on its own merits.

Good luck Rod & crew :-)

Peace,

Cameron Purdy
Tangosol Coherence: The Java Data Grid

Well done Rod and other! by John Davies

Onwards and upwards Rod, well done!

-John-

developer hub by Mittal Bhiogade

where is developer hub of I21 ?

Re: Spring Enterprise by Bill Burke

info quack wrote:
If I could sugggest... please spend some of the money on adding some documentation to the Spring Rich Client Project. Or remove it from the Spring family entirely... thanks


Lol. This brings back memories... "JBoss, please spend your 10M of VC money on improving your sucky <insert project here> documentation". Next they will be telling you that you made your documentation sucky on purpose to sell more training/support/consulting. Note to Rod and company, doesn't matter how many tech writers you hire or how many languages you translate your documentation to, nobody will ever be happy.

Corby Page wrote:
If anyone had the ability to grow organically, I thought Interface21 did.

Taking VC money can be a good thing Corby. For JBoss, it allowed us to be a lot more aggressive with both technical and business decisions.

I hate to see one of the big guys get ahold of this very independent entity.

Bringing key pieces of I21 tech to a standards body like EE6 or OSGi would isolate the community from this situation.

Bill

Re: what does this have to do with Sun? by douglas dooley

Cameron,

Perhaps in your narrow view of the JEE market there is no competition, but there is always competition, especially when one of the competitors (BEA) relies on revenue derived from a product that Sun provides for free. Is it better? I don't know, I think it is good enough to give Sun accounts the assurance that they can begin to standardize on it. That puts competing app server vendors in a position where they need to battle against Sun, like they never have before...

But through SOAP, Spring, and SCA, there is a concerted effort to minimize the scope, if not the influence, of JEE. Do I have to explain this to u? In the words of a great leader in the JEE space, there is no peace and love in software, exhibit 1 being open source v. "blended". Why can't I point out something that the ex-editor of TSS recently posted as being an either-or choice. I don't see it as that simple, as you don't, as well.

But to think that all is pleasantries when billions are at stake is foolish, and I don't take you for a fool,

douglas

Nice by Rick Hightower

Good news. Glad to hear it. Support is good. Congratulations!

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