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It wasn’t that long ago that Docker looked like it was on the ropes. In 2019, it sold its enterprise business and decided to focus strictly on a developer audience with a set of commercial and open source tools. It was a pretty big bet for a six-year-old company to sell off the part of itself that was most lucrative at the time and completely shift its focus.
A couple of months ago, the company announced that annual recurring revenue (ARR) had jumped 4x to over $ 50 million just two years after it decided to restructure. Today, the company announced a $ 105 million Series C investment on a $ 2.1 billion valuation.
CEO Scott Johnston, who has been with the company for years in various capacities, made a very clear bet on the developer community, and it is paying off handsomely for him as he has been able to shape a successful business model since the restructuring.
“Two and a half years ago, while we had this product that developers loved; while we had popular upstream open source assets and we had a known brand, it wasn’t clear whether we could take all of that and redo the product strategy we needed to go to market, redo the company business model successfully – all of that was an open question, ”Johnston said.
“We’re happy that here we are two and a half years later. We didn’t make perfect decisions or perfect bets all the time, but most of our bets have paid off and are serving developers with the products we’re shipping, ”he said.
What’s more, in a time when investment appears to be slowing down, Johnston reports that investors came to him, he had a wealth of opportunity and could have gotten more if he wanted it. “It was unsolicited, and we had a choice. We had multiple term sheets that were all competitive. And we could have raised more than 105 that we raised. And so we’re very fortunate to be able to choose. ”
He believes that in addition to being a known quantity with an open source component that is popular with developers, the potential market for developer tools is massive, especially as the demand for applications continues to grow. He said the combination of those two factors drove the investor interest in this round.
The company shrank to 70 people when it restructured in 2019. Today it is up to over 150 employees with expectations that number will double in the next year. As the company adds headcount, Johnston said that they have hard metrics related to building a diverse workforce.
“So we have an internal KPI, key performance indicator, that’s quantified in terms of diversity. And we have it at the company level, but then each of the managers, the executives for their functions, are on that as well. And again, to put teeth on it, that’s a number that we had to share with the board as well, ”he said.
He said that they look at this on a weekly basis. “We have a weekly roll-up of our progress in our hiring and recruiting funnel and there’s an explicit diversity metric in that weekly recruiting. And so, you know, it goes back to the why, right? And that’s because diverse teams are better teams. It’s better not only from a human standpoint, but it’s better frankly from a capitalist performance standpoint. So we deeply believe that and to execute that belief, we hold ourselves accountable numerically, ”he said.
Today’s investment was led by new investor Bain Capital Ventures with participation from Atlassian Ventures, Citi Ventures, Vertex Ventures and Four Rivers, along with existing investors Benchmark Capital, Insight Partners and Tribe Capital. The company has raised $ 163 million in its current guise on that $ 2.1 billion valuation. Bain’s Enrique Salem will be joining the Docker board under the terms of the agreement.
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