Data centers have never been more powerful, but they’ve never been more complicated to manage. Mesosphere is hoping that as hybrid and multicloud architectures become widespread among late-comers to cloud computing, it will be able to cash in on the need for simpler tools.
The five-year-old startup just raised a $125 million round from some rather unusual investors in the enterprise tech space as it doubles down on its automated data center strategy, bringing the total amount of funding raised by the company to just over $250 million. New money is coming in from “funds and accounts advised by T. Rowe Price Associates, Inc. and Koch Disruptive Technologies (KDT),” according to a press release. Koch Disruptive Technologies is a subsidiary of Koch Industries, a company run by gentlemen you might recognize as major financial contributors to political dystopias such as the current one.
Other new investors include ZWC Ventures, Qatar Investment Authority (QIA) and Disruptive Technology Advisers (DTA), and existing investors Andreessen Horowitz, Two Sigma Ventures, Khosla Ventures and Hewlett Packard Enterprise also participated. Mesosphere co-founder and CEO Florian Liebert told GeekWire in an interview that the company still had money left over from its last round in 2016, but said the new investors offered the opportunity to seed its technology in new areas across the various enterprises served by Koch Industries and new markets like Qatar.
Mesosphere’s flagship product, DC/OS, allows customers to manage multiple data centers or cloud deployments as if they were part of one single entity. It relies on the surge of interest in containerization kicked off by Docker a few years back and now supports Kubernetes, the popular container-orchestration product that edged out Docker’s Swarm and Mesosphere’s Marathon to become a de facto industry standard.
“We make complex technologies easy to install and operate and automatically fail over,” Liebert said. The company’s argument is that it can provide many of the higher-level services required to manage complex tech infrastructure at a cheaper price than cloud vendors like Amazon Web Services or Microsoft Azure, and without the golden handcuffs those services tend to place on their users.
This complexity is increasing as companies embrace emerging concepts like the industrial internet of things and edge computing, which you’ll hear a lot about this week at Microsoft Build. Liebert described how one customer, Royal Caribbean, realized they could use DC/OS to manage the small data centers on its cruise ships used to automate a lot of passenger services as well as its back-end data centers.
Customers like that put Mesosphere on a $50 million revenue run rate as of last November, Liebert said, and revenue has tripled year-over-year as of May. The company counts more than 125 customers as of this funding announcement, including 30 percent of the Fortune 50, it said in the release.
Liebert plans to invest in research and development with the new funds, hiring engineers and others to focus on bringing more capabilities to DC/OS. One thing on the near-term radar: exploring how DC/OS will work with functions-as-a-service, the movement otherwise known as serverless computing.
Mesosphere also plans to increase its salesforce around the world, with a special focus on working with systems integrators and other service providers to convince them to sell Mesosphere to their clients. The San Francisco company has just under 300 employees as of this May, Liebert said.
Acquisition rumors have trailed Mesosphere for years, but Liebert said that the company went into this funding round “hyper-focused right now on trying to create a sustainable business.” He downplayed any talk of an initial public offering at this point; “we’re positioning ourselves to be both interesting to the public markets but continue to be interesting to companies that might get hurt by public clouds.”
As for new investor KDT, taking money from a company so aligned with the right-wing political movement is bound to be somewhat controversial in Silicon Valley. But Liebert was careful to separate Mesosphere from the broader worldview espoused by the Koch brothers.
“We’ve taken money from a number of investors and we don’t always agree with the political views of our investors,” he said. “This was a business decision.”