UPDATED 18:04 EST / MAY 16 2024

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Frontend development startup Vercel valued at $3.25B following new $250M round

Vercel Inc., a startup that helps developers build web application frontends faster, has secured $250 million in fresh funding at a $3.25 billion valuation.

Reuters reported the Series E investment today. It was led by Accel with participation from Alphabet Inc.’s GV startup fund, CRV and a half-dozen other investors. Vercel’s annual recurring revenue reportedly topped $100 million not long before the raise.

San Francisco-based Vercel is the creator of Next.js, a popular open-source toolkit for building websites. It allows sites to render visual assets in the cloud rather than on visitors’ devices to speed up loading times. Additionally, Next.js provides the ability to build website components using React, an open-source library from Meta Platforms Inc. that eases certain coding tasks.

Vercel commercializes Node.js with a set of paid cloud services designed to ease frontend development. That’s the task of building website interface elements such as buttons, menus and checkout pages.

Vercel’s flagship offering, the DX Platform, promises to simplify the task of rolling out frontend code to production. Deploying website updates is a multistep process that companies often automate using software workflows called CI/CD pipelines. Vercel provides prepackaged CI/CD pipelines that don’t require extensive configuration and promise to speed up code rollouts by a factor of six.

The platform also offers other features. It enables software teams to create a staging environment, a copy of a website that they can use to test code changes before broadly releasing them. If malfunctioning code finds its way to production, developers can use the DX Platform to instantly roll back the update.

The service is offerd alongside managed website hosting infrastructure. The company provides servers on which customers can run their web applications, as well as a collection of cloud databases for storing website information. Both the servers and the databases can scale automatically as traffic levels fluctuate.

Vercel will reportedly use the proceeds from its latest funding round to enhance its cybersecurity features. As part of its managed infrastructure offerings, the company provides a tool that promises to protect websites from DDoS, or distributed denial-of-service, attacks. There are also access controls that enable companies to regulate how developers may interact with their frontend code.

According to Reuters, Vercel also plans to build more features for its v0 artificial intelligence service. The tool, one of the newest additions to the company’s product portfolio, can automatically generate website interfaces based on natural language prompts. It’s available in a free version and two paid editions that provide additional website development features.

Image: Vercel

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