US-based social coding start-up GitHub has finally raised its first round of funding after years of resistance, closing a $100 million funding round from venture capital firm Andreessen Horowitz.
GitHub, founded in 2008 and based in San Francisco, describes itself as “the best place to share code with friends, co-workers and complete strangers”.
It was originally founded by Tom Preston-Werner, Chris Wanstrath and PJ Hyett to simplify sharing code.
It has since grown into the largest code host in the world, with more than one million users.
For years, GitHub’s founders declined funding offers, pointing out that the company has been profitable since the get-go and doesn’t require any extra cash.
However, it’s been confirmed GitHub has raised $100 million from US venture capital firm Andreessen Horowitz, which represents the start-up’s first ever outside investment.
The funding values GitHub at $750 million, according to reports. In a company blog, Preston-Werner explains why the start-up finally decided to raise venture capital.
“Our company has been profitable for years, is growing fast, and doesn’t need money. So why bother? Because we want to be better. We want to build the best products,” he said.
“We want to solve harder problems. We want to make life easier for more people. The experience and resources of Andreessen Horowitz can help us do that.”
Preston-Werner points out that Andreessen Horowitz is younger than GitHub, which means it too is “trying to do things differently”.
“They believe in software as the future of everything. They want to help founders build great companies. They clearly have no interest in the status quo of venture capital,” he said.
According to Preston-Werner, the focus will be on making GitHub “even easier for beginners and more powerful for experts”.
Levine explains why Andreessen Horowitz invested in GitHub in his own blog, in which he is quick to point it is the largest investment the firm has ever made.
“Why did we bet the farm on a series A investment? It starts with the four founders,” Levine said.
“With only a handful of people in sales and marketing, the four grew the company to over 100 people, while growing revenue at nearly 300% annually – and profitably nearly the entire way.”
Levine said they achieved this because they took an old technology category and “turned it on its head”.
“Source Code Management (SCM) is the second most fundamental tool for a programmer after compiler and development tools. It stores, versions and branches source code being developed by teams of programmers,” he said.
“At scale, these systems become highly complex and often difficult to manage. In addition, historically SCMs have been antisocial… GitHub solves these two problems.”
According to Levine, it does this by running one large SCM in the cloud, and organising projects around people rather than code.
“These changes may seem simple at first, but their ramifications have been stunning,” he said.
“By orienting around people rather than repositories, GitHub has become the de facto social network for programmers.”
Levine also attributed GitHub’s success to its “incredible culture”.
“Tom, Chris, Scott and PJ constantly push the limits on the status quo, and drive new thinking in terms of management, hiring and clarity of vision,” he said.