OpenStack distributor, Mirantis, just announced a massive $100M Series B raise. The financing is described as the largest Series B open source investment in history, and one of the largest Series B investments in B2B software. To find out more about the announcement, and what Mirantis plans to do with the money, I spoke with Mirantis Co-Founder and CMO, Boris Renski.
VMblog: First, congratulations on the funding news! Who participated in this ground breaking Series B round?
Boris Renski: Insight Partners led the round and August Capital was a new investor. Existing investors, Intel, WestSummit Capital, Ericsson and SAP also contributed.
VMblog: Including the Series B, how much funding has Mirantis raised to date?
Renski: $120M.
VMblog: Before this announcement there were rumors that Mirantis was looking to buy out Red Hat’s investment in your company. Have you done so with this round?
Renski: Actually, no. This round was not intended to buy out Red Hat and they still retain their stake in Mirantis.
VMblog: OK, but wasn’t there some tension between Red Hat and Mirantis? And if so, what’s your relationship with them currently like? And does Red Hat partner with or support Mirantis?
Renski: Red Hat is an investor and also a competitor. However, both companies recognize that this is still the very early days of a market that is about to grow quickly by orders of magnitude. While, at Mirantis, we invest heavily in understanding our competition and winning customers, we also appreciate everything that companies like Red Hat do to help advance OpenStack forward.
VMblog: Going back to the funding news, is such a major raise intended to serve as a prelude to Mirantis going public?
Renski: At Mirantis we have a philosophy to focus on creating value for our customers, rather than looking for path to liquidity. With this capital raise coupled with our existing, very significant revenues, the company will have plenty of money for a while to execute against our OpenStack roadmap. Going public could be something we pursue when and if it becomes necessary, but for now our focus remains on building zero lock-in distribution as well as further scaling of our training and services organizations.
VMblog: What about acquisitions? There seems to be a lot of consolidation in the market with HP buying Eucalyptus, EMC buying Cloudscaling, etc. Is Mirantis looking to make any purchases?
Renski: If a particularly appealing deal comes along we would consider it, but no, we don’t have any definitive plans in that regard and we’re not actively looking. I think the money would be best served by investing in maximizing the opportunities for Mirantis. Also, I’d like to add that we believe that the consolidation you mention has been playing very much in our favor. With six hundred people and double digit quarterly revenues coupled with our pure focus on OpenStack, we now command a unique combination of agility and scale to be the best partner for customers seeking to realize the value of the open cloud.
VMblog: I have to ask. What DO you plan to do with the money?
Renski: Short answer is we’ll use it to win in OpenStack, much like Red Hat used its IPO money back in 1999 to win in the Linux space. Specifically, this means heavy investment in R&D around the Mirantis OpenStack distribution and increased investment in upstream OpenStack development. We already have 100 people contributing upstream and are responsible for 26% of the OpenStack Juno codebase; we’ll do even more in future releases. Finally, due to our pure-play focus, investment in partners is key; both from the relationship standpoint, as well as the integration standpoint. We actually have a sizable internal team dedicated to interoperability with key partners like VMware, Juniper, etc. We’ll be doing a lot more on that front as well.
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Thanks again to Boris Renski, Co-Founder and CMO at Mirantis for taking time out to speak with VMblog and answer a few questions.
