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DigitalOcean Gets $37.1 Million For Cloud Expansion
myvpsreviews
Member
DigitalOcean, the cloud service provider with facilities in New York, Amsterdam, Singapore, and San Francisco, has received a hefty $37.2 million in its first round of funding in order to build out its service.
From tc: "Cloud hosting company DigitalOcean raised a Series A round of $37.2 million at a $153 million valuation led by Andreessen Horowitz"
Comments
Means they are at what now, 80-100mil? This is going to fail so hard, others build entire DC city parts out of this cash (like half of Frankfurt by now..)
It has been killed by Vultr which provides 100 GB bandwidth monthly only for 5 dollars
Erm, wat?
I see its 1000GB BW for $5 :P
You should at least get the facts correct before posting
@Grimmy2 @myvpsreviews @Nekki
He's partially correct, Singapore, Asia has 100GB BW for $5 with their max plan being 500GB BW for $70
Because we can say that for sure about a service which has been around for a week -- and everyone in the world needs 100GB of bandwidth, the sole metric for the success of a VPS company.
I was referring to the bit about DO being killed by Vultr. DO offer the same or better B/W in the equivalent location for the same price, so the statement makes no sense to me.
more coupon, more free useage pls
When DO go under, I'm coming to your house to use your PC for free.
Are we seeing more free credits?
Any idea what their current revenue is?
Revenue: $5m
Profit: - $90m
Do is I suspect doing quite well, funding levels are based more on income or at least as much as potential, certainly at this stage. Just because they throw a few vouchers around does not mean everyone is as cheap as the kids around here who can't afford to pay.
Thanks for mentioning me and the rest of us.
I sense heavy sarcasm with the 100GB thing :P
DigitalOcean is still much better then VULTR, but VULTR is doing OK, and if they really gets all their locations online, they can get some business there.
But for the moment, my best "fake" cloud provider is DigitalOcean.
I completely agree. Vultr is claimed to be direct competition to DO, but in my opinion, they're not comparable. I understand that Vultr is relatively (or very new), but they advertised 12 locations at launch: something that wasn't available, and seemingly won't be until the "middle of March."
DigitalOcean seems to have their act together in that they plan, announce and actually stock their new locations. They feel, to me, like a "real company," although not a real cloud provider.
I like to think of DO as the new SliceHost; SliceHost was expensive, but there was a large community surrounding it that essentially allowed less experienced users to learn more about the technical aspects of running a server. I'd imagine that users of DO enjoy the simplicity of their interface, the accessibility of information, and the nearly-instant deploy/destroy functionality.
DO revenues are estimated to be already in the 12-15M $ per annum range, and growing at a rate of more than 750k a month (annualised) at this stage.
That said, their growth is right now their only value, as their cash burn is staggering.
My foot fell asleep reading this thread.
That's a lot of money.
How does that compute?
Who keeps throwing money in a black hole? What hopes do the investors realistically have of ever seeing their money back? And finally, if there was any real hope of making a decent profit then the heavy weights would have backed them financially. Not that $37.2 million is anything to sneeze at, but the heavy weights in the investing world have a whole like more money than that.
I can already smell the jelly.
Where did DO publish their recent revenue? I'd love to see some hard data to crunch.
They haven't published revenue, but reports quote 110,000 instances, growing at around 5k new a month, with over 5,000 physical servers.
You can probably extrapolate that 5k into 110k goes about 22 times, assuming 64GB HVs gives you an average VPS size of 2GB (much bigger than I would have thought)
How many of those are free though? Isn't DO known for giving service away to anyone who will take it?
If you follow that average through again, you get 110k instances at 20 bucks a month, which is 2.2M a month, tho with spare capacity and normal PR 'over egging' the real numbers are probably closer to 1GB being the average size and revenues of circa 1M a month and growing fast.
If they are generating a million a month that would surprise me. Either way, impressive for an upstart cloud operation.
With 110,000 instances, and their rate of growth, even if their $10 credits are creating a running three month churn vortex, they are still taking in 500k a month in a worse-case scenario basis.
For the investment to have valued them at 153M, means there is cash, and growth flowing in.
I am indeed, but DO do not publish revenue so no idea where $5m comes from.
Everyone keeps going on about the free vouchers, folks it's a big world out there, the people that are willing to pay for a service they need/value is far greater than those that will only use the service if it's being given away. LET represents nothing in the grand scheme of the internet, hosting, servers, etc.
Linode manages to survive by giving nothing away and starting at $20 per month despite many saying they would never last, don't be surprised that people will take a $10 credit from DO and be happy to then stay and pay $10 per month or more thereafter.
The key is marketing, Linode is great at it and DO is proving to be almost as good. The vast majority are not obsessed with CPU, Speed of disk and so on. They want a name they can trust and DO is getting there.
It is absolutely impossible to say on what basis they are getting $37.2m, probably more about paying for revenue generation streams (advertising) than infrastructure that can be built out at a much lower cost.
What is absolutely clear is that they are making money, not just from individuals. There are big names using DO for a lot of things. If the valuation is accurate and I have no doubt it is then $1m per month in revenue is short but in the right area.
They are gearing towards an eventual IPO, I will guarantee that. Could be a future EIG brand
Not a dig, I used the freebie as well but I pay them now, about $35 per month.