Interface21 (Spring) gets 10M VC Funding

Interface21, the company that develops and supports Spring has announced that it has received $10 million in Series A financing from Benchmark Capital. The new funds will be used to accelerate product development and expand marketing, sales and support infrastructure to scale their professional open source offerings around Spring and related products. InfoQ did an exclusive video interview with Rod to find out more.  Rod explained why funding, why now:

We have grown steadily over the last 2-3 years, and we are profitable, but we've reached a point where we realise that we want to do more, faster. We need to recruit more rapidly than we can do in a self funding manner, to meet demand, and we need to grow our support business more rapidly. That business has longer sales cycles than training or consulting, so it's hard to ramp it up as rapidly as we want and remain cash flow positive.

Are there any changes that we can expect to see? Rod answered:

I think the biggest change you will see is an increase in our investment in the Spring Portfolio. Looking from the outside, with Spring 2.0, Spring 2.1, Spring OSGi, Spring Web Flow, the new Spring Batch and the other portfolio projects charging along, I'm sure our pace of development looks pretty impressive. But inside, we are convinced that we can do even more, and even more quickly. That requires increased and dedicated investment on product development.

We are also planning to grow our sales and marketing capability. Currently Interface21 has NO dedicated marketing, and only one full-time sales person in the entire company. It's amazing that we have grown at the rate that we have, but, as a product company, we clearly need to invest more in these areas.

We have an established culture inside Interface21--based on values from the Spring Framework project itself--and Benchmark are investing partly because they value that. When you invest in a company that has been around for almost 3 years, and has significant revenue, it's not like investing in a pre-revenue startup. You're investing in something you believe in, rather than trying to create something new.

Everyone at Interface21 is really excited about this. Everyone is passionate about our technology (including those people who don't actually write code) and this is the right choice to put our technology first.

Benchmark partner Peter Fenton was a key figure behind the investment. Peter was also responsible for the investment in JBoss years ago. According to Peter:

very few open source projects rise above the noise to achieve critical mass, and even fewer drive fundamental product innovations.  Interface21 and its Spring Framework possess extremely rare qualities that we believe will lead to open source success—near ubiquitous adoption, a profitable business model, and a compelling vision that delivers innovative offerings to the enterprise.

Rod also talked about Benchmark as an open source VC and Peter's role:

Benchmark Capital have a great track record, and are probably the premier open source investor, with investments including Red Hat, MySQL and Zimbra. Peter Fenton, the partner who is investing in Interface21, was also one of the investors at JBoss, when he was at Accel Partners. Peter was on the JBoss board, but he has no involvement with JBoss or Red Hat today. Of course they are different businesses, but that means Peter has had a lot of exposure to open source business models. Kevin Harvey, another Benchmark partner, is on the MySQL board.

One of the major advantages of a top tier VC firm is the experience they bring. Peter was also very involved with Wily Technology, for example. Although that was a closed source business, it sold to the same large enterprise segment that we do, and had a similar position in being independent of the major vendors that it partnered with.

At JavaOne Spring also released Spring 2.1, Spring Weblflow 1.1, a partnership with Structure101, and Spring Batch. Oracle at the show also announced special tooling for Spring.

Editors note: Updated on May 14th, replaced video with a more detailed textual interview.