Ctrl IQ Inc., which does business as CIQ, said today it has raised a $26 million early-stage funding round to advance an alternative to Red Hat Inc.’s Enterprise Linux operating system.

The Series A infusion brings the company’s total financing to $33 million and its valuation to $150 million, according to co-founder Gregory Kurtzer.

CIQ is the founding sponsor and services partner behind Rocky Linux, an open-source and community-maintained enterprise Linux distribution based on CentOS, which is a fully compatible version of RHEL. CIQ Chief Executive Gregory Kurtzer was a founder of both CentOS and Rocky Linux.

Red Hat has effectively managed CentOS since 2014, when it took possession of the trademark and hired many of CentOS’s developers. However, Red Hat said in late 2020 that it would terminate CentOS updates and transition to CentOS Stream, which is described as an “upstream development platform for ecosystem developers.”

The move to shift CentOS to being essentially a testbed for features that would be later incorporated into RHEL infuriated some users of CentOS, who “have been using it as a foundational piece of their infrastructure,” Kurtzer said. The repositioning has “affected us as customers in a very negative way.”

Rocky Linux was created to be a successor to CentOS that would remain a drop-in replacement for RHEL. “It gives us a way to help the operating system without holding it hostage,” he said. “RHEL is not freely available. You must buy it from Red Hat. Rocky is completely and freely available much like CentOS was. It is as close to what CentOS was as anything out there.”

CIQ said Rocky Linux has averaged more than 250,000 monthly downloads and installations since it was announced shortly after CentOS was put on ice. The source code is taken directly from RHEL and the Rocky Enterprise Software Foundation provides migration scripts for Red Hat customers who want to shift to the free version.

CIQ intends to monetize Rocky Linux through paid service offerings and custom-packaged repositories that include service-level agreements, updates, vulnerabilities and customizations. It also has enhanced security offerings such as the ability to block buffer overflow-based vectors, which are often used in malicious attacks, Kurtzer said.

The 30-person startup has received support from Google LLC, which last month said it will offer Rocky Linux as a tier 1, Google-optimized and -supported operating system.

The funding round was led by Two Bear Capital Operations LLC with other unnamed investors participating. Funding will be used to “scale the company to meet customer expectations and demand,” Kurtzer said.

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