GitHub, a site that was built by and for coders, has finally broken down and took their first round of venture financing.
The total raised for GitHub was $100 million from Andreessen Horowitz. This investment is the largest to data for the fast growing VC firm who continues its’ dominance of the Silicon Valley VC firms.
GitHub’s valuation is at and around $750m +. Not bad for a company that has been around since 2008.
Peter Levine, a general partner at the Andreessen Horowitz, will join GitHub’s board of directors. Ron Conway’s SV Angel investment firm also participated in the funding.
What does all this mean? We’ve been following this at SiliconANGLE since 2009 with our Cloud Mobile and Social coverage. The Cloud Mobile Social trend is showing it’s value. Peter Levine from Andreessen explains
From Peter Levine from Andreessen Horowitz blog post:
We just invested $100M in GitHub. In addition to the eye-popping number, the investment breaks ground on two fronts:
- It’s the largest investment we’ve ever made.
- It’s the only outside investment GitHub has ever taken.
They had a vision for a new way to develop software and created a new kind of company to pursue it. 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.
How did they do it?
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…. At scale, these systems become highly complex and often difficult to manage.
Historically SCMs have been anti-social. GitHub solves these two problems and dramatically expands the category by changing the old model in two important ways:
- Rather than forcing every development team in the world to deploy their own SCM, GitHub runs one big SCM in the cloud and the management issues vanish.
- GitHub organizes projects around people rather than code.
By orienting around people rather than repositories, GitHub has become the de facto social network for programmers.
GitHub’s success has been mainly in their awesome product market fit. The founders and employees really understood the market need and delivered a solid product to meet that need. However, their massive valuation really comes down to the what GitHub evolved into… A Social Network for developers.
Github is extremely valuable at many levels the product, market, and user experience. Apparently, Andreessen Horowitz Peter Levine thinks it’s worth $600 million.
This is just the beginning of a trend of new social networks coming out in all verticals.
Watch the trend towards vertical markets just explode. We are watching it closely.