Aussie software development startup Buildkite has raised a massive $28 million in its first significant funding round, giving it a valuation of $200 million.
Founded in 2013, Buildkite is a continuous integration and continuous deployment (CI/CD) tool that allows software engineers to test changes as they make them.
“As engineers make changes to software they’re continuously checking those changes to make sure they haven’t broken anything,” co-founder and chief executive Keith Pitt tells SmartCompany.
Buildkite came about when Pitt was working as a software engineer himself.
He was using a CI/CD tool that was designed more than 20 years ago, and was given the job of finding something more up to date.
“I had to make this really bad compromise between speed and security,” he says.
“There was nothing that really did both.”
After some time, he couldn’t find the tool he needed. So, like any good engineer, he decided to build it himself.
“I gave it a crack … and I got something working,” he says.
He brought co-founders Lachlan Donald and Tim Lucas on board, and “seven years later we’re still working on the project”.
The startup’s first major funding round is led by US venture capital firm OpenView and also includes General Catalyst.
Pitt doesn’t disclose revenue figures, but he says the startup has been profitable almost since day one.
Now it has more than 1000 clients, including the likes of Shopify, 99 Designs and realestate.com.au.
Flying under the radar
Previously, BuildKite raised $200,000 in angel funding, which allowed Pitt, Donald and Lucas to make the leap from working on a side-hustle to full-time founders.
Since then, the business has been growing steadily, and Pitt and the team haven’t felt the need to raise further external funding.
“We had to wait for the right time,” he says.
A conversation with a prospective customer in the US last year made it clear that that time had come.
The potential customer said Buildkite was the best CI/CD tool they had tried, Pitt recalls. The problem was, they had never heard of the brand previously, and that was a red flag.
“That was a bit of a kick in the guts,” Pitt says.
The founders noticed people kept referring to Buildkite as “tech’s best-kept secret”, he adds, but that wasn’t exactly what the founders were going for.
“We didn’t really have much credibility to the brand.”
For a business that’s been flying under the radar for seven years, a $28 million raise and $200 million valuation is one way to get yourself noticed.
“We’re really proud of this, we’ve taken seven years to do this, we’ve taken our time,” says the founder.
Needless to say, this funding round will see some serious dollars put towards a global marketing campaign, Pitt says.
The team will also be investing in improving its customer support offering, and generally focusing on continuing a trajectory of sustainable growth.
More than anything, however, the funding shows that not only is Buildkite on the radar, it’s here to stay. And that’s a surprisingly important consideration for its clients.
“In our industry, a lot of companies come and go — they get bought out, they fizzle away,” Pitt explains.
“Companies are quite scared sometimes of choosing the wrong tool, especially if they want to invest in a tool for the long run. They want it to be around for a while.”
For Pitt, the goal is for Buildkite to be the industry standard for CI/CD.
Software is not going anywhere, he notes.
“It’s not like there’s going to be a shrink in the industry. It’s only going to get bigger.”
Conversely, he also wants to keep the business small. Currently, Buildkite has a team of 26 people, and he doesn’t plan on growing that much.
“Our goal is to stay small, stay lean, stay fast,” he says.
“We think smaller teams can work fast … you can collaborate much easier, you don’t have to get approval from six or seven different departments to build something,” he adds.
“Ever since day one, we’ve done all the prototyping, we’ve built fast, we’ve shipped fast, to get feedback fast.
“That’s very hard sometimes in big companies. They aren’t in a good position to innovate.”
It’s a very startup mentality. But, in many ways, Pitt doesn’t really see Buildkite as a startup, either. From his point of view, he’s simply built a profitable business.
He was focused on making sales before the business spent money, he says; he wasn’t burning through cash to make revenue later.
He’s also turned down offers of investment in the past.
“I’ve always looked at it as a business, and that mindset was really important for me,” he says.
Of course, we can’t talk funding without also talking about the current COVID-19 environment, which has seen some startups struggle to find investors, and the runway to keep them going.
But when asked whether Buildkite is one of the businesses that could see an uptick, post-pandemic, Pitt is “betting on yes”, he says.
On a practical level, a lot of the older CI/CD tools that are still in use require someone to physically access servers in an office, he explains.
When that’s no longer possible, people might think about switching.
But at the same time, the widespread shift to working from home means “there’s going to be a whole new slew of problems that the world is going to face”, Pitt says.
And there are a lot of smart people out there thinking up ways of doing things slightly differently to meet these new challenges.
“A lot of people are going to have some real good ideas during this period,” he says.
“We’re expecting a lot of new companies to come out of this,” he adds.
“We hope that Buildkite can support them in that journey.”