One day, three deals, $150 million in open source funding

Deals with GitHub, AlienVault, and Sonatype bring big money to open source quickly.

The VC community continues to invest heavily in open source, as over $150 million in new investments were announced yesterday in just three deals. That is a lot of money by anyone's mark and signals that the investment community still thinks open source can lead to big profits. The three companies announcing new investments were:

1.) GitHub

The software repository has become the de facto standard for storing source code since it was founded in 2008 (with a tip of the hat to Sourceforge, which I still love and admire). Since 2008, VC firms have been trying to get a piece of the Hub, but its founders had resisted. Being profitable and having a who's who of tech giants as customers can give you that kind of independence.

All of that ended yesterday, though, when GitHub announced that it has accepted a $100 million (that's right, One Hundred Million Dollars) investment by famed Silicon Valley VC firm Andreessen-Horowitz.

The investment represents the single-largest investment the firm has made to date. In addition to the Adreessen-Horowitz investment, SV Angel was also a part of the deal. Rumor has it that this valued GitHub at about $750 million.

By anyone's measuring stick this is a lot of money. According to the blog post on their site about the investment, GitHub wants to use the money to create easier access:

We want GitHub to be even easier for beginners and more powerful for experts. We want GitHub everywhere-whether you use Windows or Mac or Linux or some futuristic computer phone that hasn't been invented yet-we want GitHub to be an awesome experience. We want to make it easier to work together than alone. We want to keep changing the way software is developed for the better by making collaborating easier and sharing a no-brainer.

2.) AlienVault

The makers of the open source OSSIM, the open source security and information manager, announced another round of financing yesterday as well. Also led by a blue chip VC firm, Kleiner Perkins Caufield & Byers, this third round of financing amounted to $35 million.

The security information management space has been hot for a long time and OSSIM is a great example of open source software. Additionally, over the last six or so months, AlienVault has added many new executives formerly from Fortify Software, which was acquired by HP.

In way of disclosure, I have been friendly with the founders of AlienVault for a long time and may be joining their Board of Advisors shortly.

3.) The third open source investment announced in the last 24 hours is Wayne Jackson's Sonatype. Jackson, the former CEO of Sourcefire, has been leading Sonatype's quest to become the place for bits and pieces of software modules that can be easily reused in development projects.

This $25m round was led by New Enterprise Associates, with existing investors Accel Partners, Hummer Winblad Venture Partners, Morgenthaler Ventures and Bay Partners all participating.

Like the GitHub deal it signals that investors are happy to invest in software development infrastructure products, whether they cater to open source projects or not.

So, a big couple of days for open source investment. Usually these kind of things come in waves, so we will wait to see if any other deals come over the wire next.

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Copyright © 2012 IDG Communications, Inc.

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