The world’s “fastest growing” cloud provider raises $37M to recruit top-tier talent

trouble in the clouds paper airplanesDigitalOcean, an emerging cloud provider that is apparently growing faster than AWS, has just closed a $37.2 million Series A financing led by prominent Silicon Valley VC Andreessen Horowitz. The funding represents a huge vote of confidence in the startup, which is punching above its weight in an ultra-competitive market dominated by some of the biggest tech companies in the world.

Founded in 2007 by four veteran entrepreneurs, the New York-based firm is a graduate of the prestigious Techstars Accelerator with an attitude to match. Instead of trying to differentiate on value-added features like most newcomers in the public cloud space, DigitalOcean is looking to beat Amazon at its own game with low-cost and easy to use virtual servers geared primarily towards budget-strapped developers. And it’s succeeding.

According to a December report by Netgear, the firm is outpacing the competition by a sizable margin, having increased the number of web-facing computers to its name by more than 22 times since the beginning of 2013.

“Our December 2013 Web Server Survey showed a month-on-month gain of 6,514 web-facing computers at DigitalOcean; Amazon, meanwhile, grew by an almost as huge 6,269 web-facing computers,” NetGear wrote in its report. “DigitalOcean is now the 15th largest hosting company in terms of web-facing computers — a remarkable feat considering DigitalOcean had only 280 web-facing computers at the start of this year.”

DigitalOcean plans to allocate most of the new capital to “hiring top-tier engineers” and bolstering its global infrastructure footprint in an effort to attract more developers, according to co-founder and CEO Ben Uretsky. The company said that it will focus on adding commonly requested features, appealing to the developer community in particular. As software continues to take over the datacenter and drive innovation in the cloud, developers are the key target demographic for Amazon AWS, Microsoft Azure and DigitalOcean, to name a few.

What’s DigitalOcean’s biggest appeal to developers, and why does this community matter for the modern data center? Simplicity, the company writes in a blog post this morning.

“Users can spin up a virtual server in 55 seconds.We’ve continued to focus on building a product that we’re passionate about, because we know that if we’re passionate about it then our developer community will be too. For DigitalOcean it’s not our game-plan to seek out differentiators with our competitors, e.g. what we can do faster, what we can do better. We want to abstract all that because our users know we offer the best hardware and we’re expanding capacity throughout the world. At the end of the day, everyone’s building with the same tools. What we want to focus on is user-experience, similar to how Apple focuses on design. We want developers to have a sense of familiarity and joy while using our service that brings one word to mind: Love.”

photo: Ares Nguyen via photopin cc