Founded in 2012 by Yancey Spruill, DigitalOcean provides a cloud platform designed to simplify app creation for developers, startups and SMBs. The company targets a range of users from individual developers to small and medium businesses. It reports $300M in annual recurring revenue and serves more than 500,000 customers globally, with nearly two-thirds located outside the U.S. DigitalOcean’s core product is a developer-focused cloud for building modern applications. The company says it will use new funding to continue expanding operations and its business reach. CEO Yancey Spruill is cited in the company’s founding and leadership. DigitalOcean offers self-serve cloud infrastructure targeted at SMBs and developers, attracting roughly four million website visitors per month and converting tens of thousands of new customers. The company reports all revenue as recurring and had an annualized run rate of $200M in 2018 and $250M toward the end of 2019, with an expectation to reach a $300M annualized run rate in the first half of 2020. Management says DigitalOcean grows at a mid-20s percentage rate, posts EBITDA in the low-20s, and experiences de minimis churn after customers have been on the platform for a year. The firm emphasizes low customer-acquisition cost via its self-serve motion and reinvests operating cash flow into the business rather than relying on equity dilution. Leadership expects to become free-cash-flow profitable within two years and plans to scale to $1 billion in revenue over the next five years; an IPO remains an option but is not imminent. The company intends to use recent funding to invest in partnerships, boost product investment, and grow an early-stage inside sales capability. DigitalOcean is a cloud computing platform built for software developers and is led by CEO Ben Uretsky. The company provides developer-focused cloud infrastructure and reported a registered customer base of 708,000 users who have launched over 13 million servers. DigitalOcean secured a $130M credit facility to purchase equipment and support its global expansion. That credit facility complements an $83M Series B equity financing. The company plans to use the financing to meet increasing demand for its platform and to continue expanding internationally. DigitalOcean provides cloud infrastructure services focused on simplicity and competitive pricing for developers. The platform has attracted 500,000 developers who have launched over 6 million cloud servers since launch. The company plans to broaden its feature set, including networking improvements such as floating IPs and a cloud storage service slated for the first half of 2016. DigitalOcean has expanded its global footprint and is shifting focus from pure scaling to product development. Financially, the company has raised $173.2 million to date, including a $50 million debt financing in December, and has occasionally been profitable. Management intends to use the new capital to build features that help startups grow on its platform. DigitalOcean offers simple SSD-based cloud hosting aimed at developers, with an intuitive control panel, API and KVM virtualization. The company reports it has spun up more than 2 million cloud servers and offers $5/month plans with a 99.99% SLA; users can create a server in 55 seconds. DigitalOcean has five server locations (New York, San Francisco, Amsterdam, Singapore and London) and is headquartered in New York City. The company has seen rapid user growth—more than 26,000 new active users in October (a 57% year-over-year increase) and an average of 20,000 new users deploying servers per month this year. Management plans to expand internationally and accelerate feature development by hiring engineering talent and tripling headcount before the end of next year. Some capital will be used to lease additional equipment to scale globally and support continued customer acquisition.

Total raised

$463M

Funding rounds

8

Latest round

Series C

Latest activity

May 2020