[HN Gopher] Vercel raises $150M Series D
___________________________________________________________________
Vercel raises $150M Series D
Author : leerob
Score : 217 points
Date : 2021-11-23 13:21 UTC (9 hours ago)
(HTM) web link (vercel.com)
(TXT) w3m dump (vercel.com)
| LisaDziuba wrote:
| wow....
| friedman23 wrote:
| I'm happy for the folks at vercel, Next.js is really an amazing
| framework. Wish you all the best.
| carlsborg wrote:
| Impressive execution and product strategy.
| leerob wrote:
| Thank you so much!
| ghoomketu wrote:
| They have such a terrible landing page though.
|
| Having heard of this first time I tried looking it up and all I
| see is this:
|
| > Vercel combines the best developer experience with an obsessive
| focus on end-user performance. Our platform enables frontend
| teams to do their best work.
|
| The heading above it is even more nonsensical. So many words
| which convey absolutely nothing to me.
|
| Can anyone please tell me what does it do? Is it a cdn or some
| kind of hosting?
| leerob wrote:
| Vercel is a frontend cloud platform. It works with any frontend
| framework (or just HTML) you prefer. React, Next.js, Svelte,
| Vue, Nuxt, etc.
|
| https://vercel.com/docs
| jollybean wrote:
| That does not explain what it does.
|
| This is the exact same issue that came up last time they
| raised money, #1 post: 'What is it?'.
|
| From the doc page:
|
| ...
|
| "Vercel is a platform for frontend frameworks and static
| sites, built to integrate with your headless content,
| commerce, or database.
|
| We provide a frictionless developer experience to take care
| of the hard things: deploying instantly, scaling
| automatically, and serving personalized content around the
| globe.
|
| We make it easy for frontend teams to develop, preview, and
| ship delightful user experiences, where performance is the
| default."
|
| ...
|
| That _still_ does not say 'what it does'.
|
| Is this a hosting service? Some open source UI like React?
| Does it to back-end logic?
|
| Saying "It'A a Front End Framework That's Really Cool And
| Solves All Your Problems" is not marketing.
|
| This is a fairly giant marketing/communications fail.
| carnitine wrote:
| Sorry, but the comment you're replying to definitely does
| explain what it is. It obviously requires some domain
| knowledge but that's fair to assume.
| jollybean wrote:
| This is not about comments on HN, it's about
| communication on their site.
|
| I have enough experience to be able to know what it is
| from a quick summary, but I still don't quite get it.
|
| It's an epic communications failure.
|
| Vercel marketing team has created a huge problem on the
| funnel whereby a lot of casual / semi-interested visitors
| are effectively bouncing without having ingested a
| nominal understanding of 'what it is'.
|
| Technology is not quite like brand marketing where
| 'Jordan / Kapernick / Yeezy' do the selling, it's
| generally something we need to understand in order for it
| to make sense. The 'aha' moment can only come after that.
|
| Vercel does face the additional challenge that 'Next.JS'
| is not a widely known framework, and they have to
| additionally explain that, but it's not an insurmountable
| problem.
|
| This is not uncommon in SaaS actually, but it is kind of
| ridiculous.
|
| As a rule of thumb: if people feel the need to visit your
| Wikipedia page to understand 'what you do' - then the
| marketing department is acting against the best interest
| of the company, and is literally a source of confusion
| instead of clarity.
| thelittleone wrote:
| Perhaps Vercel is ok having visitors bounce who don't
| understand what they do with the marketing copy as is.
| Maybe they're not trying to be everything for everyone?
| archeroed wrote:
| CDN (edge network as they call it) + host your serverless
| functions. All that automatically after you push your code to a
| remote git repos.
| fortydegrees wrote:
| It hosts your next.js website.
| tomnipotent wrote:
| Or Nuxt, Gatsby, Blitz, Hugo, Svelte, Vue, Vite and many
| more.
| [deleted]
| Zababa wrote:
| It's Heroku, but for React.
| [deleted]
| [deleted]
| klelatti wrote:
| Landing page just crashed my 2019 MBP (not just Safari) -
| restart required!
| illumanaughty wrote:
| To be fair they jump right to the nuance of why you'd choose
| them, assuming you know who they are. Coca-Cola's website
| doesn't tell you what coke is, it talks about
| experiences/moments..etc. I share your frustration to some
| extent but I understand their reasoning.
| JohnWhigham wrote:
| Yup. What sells isn't actually the product, it's what
| feelings the product invokes!
| netcan wrote:
| confusion, frustration, anxiety
| 1_player wrote:
| I don't choose a framework or hosting service because of
| what feelings it invokes. My boss wouldn't like that very
| much.
| jollybean wrote:
| "but I understand their reasoning."
|
| It is not 'reasoned' and they are definitely not intentional
| in their focus, they have just put some scruff on a page
| that's confusing.
|
| Companies fail at these things all the time because often
| there are no checks and balances.
| lamnk wrote:
| Coca-Cola, Nike ... are some magnitudes different in brand
| recognition. They can afford to do that. I find it quite
| frustating when I'm on some startups' websites and after 1-3
| clicks around I still don't know what their products or
| services do, lost in marketing/tech jargons. After that I
| just quit. Come on people, use English!
| jollybean wrote:
| "To be fair they jump right to the nuance of why you'd choose
| them, assuming you know who they are.
|
| Coke is 1) a drink. and 2) 7 Billion people know what it is.
|
| Vercel is 1) complicate and 2) nobody knows who they are.
|
| It's such an embarrassing problem for them, I find it hard to
| fathom how they even have new users, much of their language
| is dense and ridiculous like this.
| icemelt8 wrote:
| Umm, if you don't know what Vercel is, tbh you're living
| under a rock. Its now the default way to host a webpage.
| ryanSrich wrote:
| SPA web hosting
| _jayhack_ wrote:
| ... or MPA web hosting
| webdeployer wrote:
| They've been raising what, 2 rounds per year at this point? If
| they're burning through cash at that rate, it seems like it's
| time to host stuff on something more sustainable like Digital
| goddamn Ocean One of these days Series K will fall through and
| the amazing future of web platform will shut everyone's websites
| down
| jmondi wrote:
| Am I the only one around here that is less and less excited about
| Vercel as they raise more and more money?
| vvoyer wrote:
| Since your comment is popular you may not be the only one but
| then the question is: why? I am genuinely wondering why you
| would get less and less excited the more they raise. Any
| specific reasons?
|
| Thanks!
| soorajsanker wrote:
| Can we expect IPO next year :p ?
| latenever721 wrote:
| Can't believe
| snarf21 wrote:
| Money is free right now, get while the getting is good.
| MathCodeLove wrote:
| In that case I'll take 12 money please.
| qeternity wrote:
| It's free. Why only 12?
| hef19898 wrote:
| Dependa on the unit of measure behind money, that was never
| specified!
| MathCodeLove wrote:
| Can't get greedy now, I don't want to be responsible for
| the next wave of hyper-inflation.
| tigerlily wrote:
| Go on, have some more. It's only money :)
| dang wrote:
| We detached this subthread from
| https://news.ycombinator.com/item?id=29317827.
| tekkk wrote:
| Now that's a lot of money. It seems admirable to have "Support
| open-source projects" as their first item but I wonder what
| portion of that funding goes to open-source. Is it an euphemism
| for hiring open-source maintainers to work on integrating their
| projects to Next.js stack? I mean certainly Vercel aren't just
| donating the money away.
|
| But I assume most of the money goes to hiring new folk. Dunno how
| much new engineers you can get out of it. Anyway, good for them.
| [deleted]
| leerob wrote:
| https://news.ycombinator.com/item?id=29318420
| leerob wrote:
| Lee from Vercel here. Happy to answer any questions about Vercel
| and our plans for this new round of funding.
| admn2 wrote:
| Hi Lee, any plans to remove the restriction from the Hobby plan
| that disallows any sites transacting any sort of commerce? To
| my knowledge, Cloudflare Pages and Netlify don't have this
| restriction.
| jjallen wrote:
| Thanks Lee.
|
| So what are your plans for this funding? I know that Vercel
| just raised $100M a few months ago (it seems).
| leerob wrote:
| We're using the funding to:
|
| - Support open-source projects
|
| - Make the Web Edge-first
|
| - Build the end-to-end development platform
|
| - Grow our team
|
| Happy to dive further into any of these. We did raise our
| Series C in June:
| https://vercel.com/blog/series-c-102m-continue-building-
| the-....
| outside1234 wrote:
| What do you mean by edge first?
| itwy wrote:
| They gave CDN a new name to milk venture capitalists.
| leerob wrote:
| To me, the difference between a CDN and an Edge Network
| is that the former is for hosting static assets, where as
| the latter is for both storage _and_ code execution.
| youngtaff wrote:
| The three major CDNs (Akamai, Cloudflare and Fastly) all
| support code execution at the edge, and all have (or will
| have) storage at the edge too
|
| There's also a real question of whether Vercel and
| Netlify are really at the edge when they're mainly
| running in AWS, GCP etc data centers rather than
| deploying their own hardware at edge locations, ISPs etc.
|
| Don't get me wrong I think Vercel and Netlify are
| interesting but they seem to talk about being 'on the
| edge' while they really aren't ATM
| leerob wrote:
| We believe the future of the frontend is "at the
| edge"[1], meaning it's as close to your customers as
| physically possible. The only way to beat the speed of
| light is to be closer[2]. Frameworks and tooling should
| be designed with this constraint from the start[3].
|
| [1] https://vercel.com/edge
|
| [2] https://rauchg.com/2014/7-principles-of-rich-web-
| application...
|
| [3] https://vercel.com/features/infrastructure
| machiaweliczny wrote:
| My out of ass opinion. This edge stuff could be nice if
| only there was some good DB that utilised this model.
| Then we could have simple to write/work web apps
| competitive with mobile (if only Safari supported
| preload)
| siquick wrote:
| Planet Scale is probably the closest to what you're
| describing here.
|
| https://planetscale.com/
| terpimost wrote:
| Vercel is great! Any plans to have some kind of DB or
| object storage?
| leerob wrote:
| :)
| halfmatthalfcat wrote:
| How can you possibly make the entire Web edge first? Would
| a precondition not be to capture all of the web traffic
| through Vercel first?
| no_wizard wrote:
| Why did you jump the question above this asking for
| concrete numbers on open source support? I'm interested in
| this as well
| leerob wrote:
| I answered :)
| https://news.ycombinator.com/item?id=29318420
| no_wizard wrote:
| As noted in reply to that comment you skipped the part
| that is really the meat of the question.
| leerob wrote:
| We do direct donations to open source projects through
| OpenCollective, GitHub Sponsors, and more. Sorry that
| wasn't more clear!
| miyuru wrote:
| Any plans to add IPv6 support? I see that you use the
| 76.76.21.21 as a vanity IPv4 address surely you can do the same
| IPv6 as well.
|
| This is the main reason I refer clients to Netlify as I use
| IPv6 support to measure the maturity of a platform and its
| engineers.
| nostrebored wrote:
| Why would you use this as a metric?
|
| Working for AWS and working with hundreds of customers a
| whopping 0 of them ever required ipv6.
| lwb wrote:
| How do you feel about GCP?
| sydthrowaway wrote:
| How are you going to stop Facebook employing Embrace, Extend,
| Extinguish.
| [deleted]
| archeroed wrote:
| React is free and open source, they could always fork it and
| I guess they are protecting their backs by supporting Vue and
| Svelte ( employed the creator full time to work on Svelte )
| zain wrote:
| Any support fo HIPAA compliant workflows?
| pokepim wrote:
| Is Vercel a Netlify alternative mainly focused on React? I've
| been using Netlify a lot because I have been developing mostly
| in Vue and sometimes a bit using Nuxt. What was most enticing
| to me (apart from free tier for personal projects, but I see
| Vercel has one too?) is that there were a lot of tutorials,
| guides how to setup CI/CD using Azure Devops/Github etc. So
| basically no matter what I have chosen there was neat guide for
| the system. I know that its nothing too complicated to create
| one from scratch but trying out new tools without documentation
| might be sometimes too bothersome and there are sometimes
| things that could take a lot of time to solve on your own. I
| hope you guys will also provide some guides how to integrate
| Vercel with existing projects on Azure Pipelines or other CI/CD
| alternatives. Would really want to try a compare.
| leerob wrote:
| We're focused on supporting all frontend frameworks (and we
| created Next.js, so that's one of our favorites). You are
| correct, we have a free tier for your personal projects.
| While we do have git integrations with GitHub, GitLab, and
| Bitbucket, you can always build custom CI/CD with our CLI/API
| to support your provider of choice. Good feedback on a guide
| specifically for Azure, we will create this!
| 0des wrote:
| Hello Lee, congrats and thanks for taking questions.
|
| In advance I'll apologize for being this direct, answers can
| get fishy sometimes these days, so I will parameterize my
| query, so to speak:
|
| What portion (concrete numbers) are at minimum being earmarked
| for supporting open source projects and devs directly? I don't
| mean t-shirt budget and things, I mean what is the total amount
| of funds that will be donated directly to open source projects
| and devs?
| leerob wrote:
| Happy to clarify, but hard to give exact numbers. First,
| Next.js - we invest into our core team and also growing that
| community (events, supporting creators, etc). It's a major
| investment for us. Then, we have a bunch of other open-source
| libraries and frameworks that we support, like SWR, SWC,
| webpack, and friends. We also sponsor and support frontend
| frameworks like Nuxt, Astro, Svelte, etc (through
| OpenCollective and GitHub Sponsors) as well as giving free
| Vercel accounts to teams like tailwindcss.com! Finally, we
| hired Rich Harris (creator of Svelte) to work on Svelte full-
| time and grow that open-source community.
| 0des wrote:
| Thank you for the response; should we interpret this as
| there will be minimal transactions in the form of direct
| donations of currency to open source projects and
| developers? I hope this isn't taken as you being grilled, I
| just had a specific question that I don't feel has yet been
| answered.
| leerob wrote:
| We do direct donations to open source projects through
| OpenCollective, GitHub Sponsors, and more.
| 0des wrote:
| This is the response I was looking for, thank you.
| damsta wrote:
| Any plans to support Vue as well?
| leerob wrote:
| We already support Vue and Nuxt (and all other frontend
| frameworks): https://vercel.com/new/templates
| ushakov wrote:
| can someone eli5 why investors are throwing so much money at
| Vercel, Netlify and Gatsby?
|
| what kind of promises are they making in exchange of the capital?
|
| why don't more capable platforms like Render or Fly.io raise as
| much?
| anurag wrote:
| We (Render) announced our $20 million Series A yesterday:
| https://render.com/blog/render-series-a.
|
| Why not $150M? All these companies were founded ~4 years before
| Render and it takes time to build to the point where these huge
| valuations and funding amounts make sense (to the extent they
| do).
| deltron3030 wrote:
| You're the only service apart of AWS and DO I'm aware of
| where I can host WordPress and static sites using the same
| account and dashboard. It's not the sexiest tech stack for
| Startups, but a WP plugin for static site generation and
| docker deploys (pro plan) would be killer.
|
| There are some neat static site generator plugins out there
| (simplystatic, wp2static) which can be used in localwp, an
| easy to use and popular local dev environment from wpengine.
|
| People could start with a static site for free/cheap,
| deployed from their local env to Render, and then move to
| docker when their sites and dynamic needs grow. This could
| make it a lot easier for peeps building their audience with
| blogs and digital products before they get into SaaS.
| tptacek wrote:
| I dunno, probably mostly we didn't ask for it? :)
| ushakov wrote:
| why wouldn't you? other guys raising hundreds of millions!
| ignoramous wrote:
| Have they been speaking with Bryan Cantrill?
| https://news.ycombinator.com/item?id=28460504
| machiaweliczny wrote:
| Have you seen returns on CloudFlare? I guess they hope to grab
| even more by mixing this with ala Heroku + Firebase maybe.
| nkotov wrote:
| We're in the PaaS space and we've recently went through
| fundraising - a good number of investors are basically just
| waiting and seeing on other PaaS solutions to see which one
| makes it to the top and then throw as much money at them as
| they can.
| thewarrior wrote:
| These companies can get big enough to be acquired by AWS ,
| Azure at some point. This is now the new Heroku.
|
| The next big startup could be an application on Vercel
| maintained by 2 people instead of a tangle of micro services
| and AWS configurations maintained by 20.
| jmacd wrote:
| Being "acquirable" is one of the things you often forego at
| valuations like this.
| thewarrior wrote:
| Why ? Valuations are generally high these days and Big tech
| has the cash. If there's a crash all valuations go down and
| they're even more acquirable.
|
| The acquisition doesn't have to happen at these valuations
| for the investors to make money. See - Liquidation
| preferences
| ryanSrich wrote:
| Herkou's exit wasn't that great though. Granted, $200m isn't
| an insignificant amount of money, but Netlify and Vercel are
| valued at billions. They would have to sell for 10x what
| Heroku sold for to meet expectations.
|
| I just don't see the valuations lining up, but I'll probably
| be wrong.
|
| I also don't know who they get acquired by. I don't see AWS
| making acquisitions like this. From what I've seen, it seems
| like they try to buy companies at lower valuations (than
| multiple billions).
| quartz wrote:
| Heroku's exit was pretty huge for its time. In fact it was
| the largest YC exit to-date.
|
| For context Heroku was created in 2008 just after the
| housing crash. By the time they exited Facebook was still
| 2.5 years away from going public and a solid seed round
| still looked like a few hundred grand if you were a hot
| company (on top of the ~17k you'd get from YC).
| thewarrior wrote:
| These companies can be disruptive innovators by focusing on
| Niches that the big companies won't care about because
| they're tiny. For eg - managed react applications. IIRC
| Firebase was acquired by google. But the plan is to go
| after all of AWS slowly from a different direction. Cloud
| flare is doing the same thing and their stock is going
| gangbusters.
|
| Cloud services are one of the most profitable businesses to
| ever exist. There's so much lock in and network effects.
| Especially with managed solutions like these.
| ignoramous wrote:
| But: _The Innovator 's Solution_ to the Innovator's
| Dilemma is well-understood at this point. Incumbents know
| well to not ignore upstarts. Knowing (Intel v ARM [0])
| and reacting are two different things, of course.
|
| [0] ref "red teaming at Intel",
| https://news.ycombinator.com/item?id=21095977
| thewarrior wrote:
| It's not easy because of all the bureaucracies and
| inefficiencies at large companies. Most employees at AWS
| are probably barely inspired compared to the people
| working at Vercel who can also ship much faster. Nothing
| new here just what PG has been saying for years.
| ignoramous wrote:
| > _It's not easy because of all the bureaucracies and
| inefficiencies at large companies._
|
| The Innovator's Solution addresses these and other
| issues.
|
| http://web.mit.edu/6.933/www/Fall2000/teradyne/clay.html:
| _Even after correctly identifying potentially disruptive
| technologies, firms still must circumvent its hierarchy
| and bureaucracy that can stifle the free pursuit of
| creative ideas. Christensen suggests that firms need to
| provide experimental groups within the company a freer
| rein. "With a few exceptions, the only instances in which
| mainstream firms have successfully established a timely
| position in a disruptive technology were those in which
| the firms' managers set up an autonomous organization
| charged with building a new and independent business
| around the disruptive technology." This autonomous
| organization will then be able to choose the customers it
| answers to, choose how much profit it needs to make, and
| how to run its business._
| subpixel wrote:
| That's my take. What matters is how much control you cede
| when you take $200+M.
|
| If you can hold onto control of your company and take a few
| million off the table, why not?
| ushakov wrote:
| typically you shouldn't lose more than 20% each round
| ignoramous wrote:
| > _I also don't know who they get acquired by. I don't see
| AWS making acquisitions like this. From what I've seen, it
| seems like they try to buy companies at lower valuations
| (than multiple billions)._
|
| No reason why this won't change. A market leader needs to
| consolidate their position year-after-year. GitHub was a
| great acquisition AWS missed. They shouldn't want to miss
| the _next_ GitHub.
| grp000 wrote:
| Yeah, or Amazon just copies their business model and
| launches it as another service on AWS.
| ignoramous wrote:
| Copying just the business model would not break through
| network effects, the kind of which GitHub has. Also see:
| https://medium.com/s/story/jeff-bezos-jack-ma-and-the-
| quest-...
| nkotov wrote:
| AWS most likely won't acquire - they'd rather build their own
| solution that does 80% of the job okay.
| kylegill wrote:
| Can confirm, AWS Amplify got 80% of my job done trying to
| deploy and manage a FE stack.
| [deleted]
| ushakov wrote:
| they don't run backend/databases though?
| icemelt8 wrote:
| Good point, for that there is another hot category of
| startups, such as Supabase and nhost.
| ratww wrote:
| They do have Edge Functions, which is similar to Lambda.
| Same with Netlify and Cloudflare. For DBs you have to seek
| somewhere else.
|
| It's not really something that will run your Rails backend,
| but it has the potential of doing a lot for creative small
| teams.
| leerob wrote:
| To clarify, we have Serverless Functions[1] which are
| similar to Lambda, as well as Edge Functions[2] which are
| similar to Cloudflare Workers.
|
| [1]
| https://vercel.com/docs/concepts/functions/serverless-
| functi...
|
| [2] https://vercel.com/edge
| youngtaff wrote:
| Where are your edge locations - doesn't seem to be any
| information on your site...
| ushakov wrote:
| why would any sane person vendor-lock-in all backend code
| to a single provider?
| [deleted]
| addandsubtract wrote:
| You don't. You write your backend code and vercel (and
| others) turn it into serverless functions that can be
| deployed on AWS or Cloudflare. Or whoever else decides to
| offer serverless functions. Or you extract your backend
| and host it yourself. You're not vendor locking yourself.
| pritambarhate wrote:
| You can deploy next.js application on any server which
| supports Node.js.
| archeroed wrote:
| Haven't yet used their /api serveless functions but I
| guess it's standard nodejs functions, so not that much
| vendor lockin
| viginti_tres wrote:
| AFAIK they're working on it
| danpalmer wrote:
| This is likely fine for the typical "Digital
| Transformation" projects at huge enterprises that have a
| ton of cash to spend on things like this.
|
| Everything is a Mainframe or SAP installation under the
| hood somewhere, but layers and layers of API mean that
| product teams can mostly ignore the complexity and ship a
| mediocre app that is only really a frontend.
| 2c2c2c wrote:
| heroku dropped the ball on easy to deploy cloud infra
| lghh wrote:
| What about Render and Fly.io make you feel they are more
| capable?
| tptacek wrote:
| Fly.io and Vercel don't even do the same thing. We're
| different, not more or less capable.
| ushakov wrote:
| you still have to compete with them though?
| tptacek wrote:
| I'm sure there's some sense in which we do, but it's not
| at all how we think about the world.
| giorgioz wrote:
| It seems Round C of $102M was just in June 2021.
| https://techcrunch.com/2021/06/23/vercel-raises-102m-series-...
|
| What are the reasons for two rounds so close to each other?
| mbesto wrote:
| Super simple answer - because there is an unprecedented
| abundance of capital (to the tune of nearly $1T for private
| capital markets) and they were very likely oversubscribed on
| that first round. So...why not?
| MathCodeLove wrote:
| Where do you get this information? I believe you, but I'd
| like to look more into it.
| mbesto wrote:
| https://www.bain.com/globalassets/noindex/2021/bain_report_
| 2...
|
| Page 19
|
| FTA:
|
| _It's hardly surprising that many GPs were afraid Covid-19
| would put an end to the past decade's golden era of private
| equity fund-raising. But those fears turned out to be
| unwarranted. Global fund-raising of $989 billion was a
| decline from 2019's all-time record of $1.09 trillion (see
| Figure 18). But it was still the third-highest total in
| history, and if you add in the $83 billion raised for
| SPACs, it was the second highest. All told, the industry
| has raised almost $5 trillion in capital over the past five
| years. Buyout funds alone raised about $300 billion in
| 2020, or $340 billion if you include SPAC capital aimed at
| buyout-type targets, estimated at $41 billion (see Figure
| 19)._
| MathCodeLove wrote:
| Thank you!
| hackitup7 wrote:
| If you're asking about the oversubscription, many
| fundraising rounds these days are highly competitive and
| oversubscribed due to an abundance of capital. So it's
| common for hot companies to have many suitors.
| MathCodeLove wrote:
| I was mainly asking how does one know that there is an
| abundance of capital? Is there some specific report or
| datasheet to look at?
| lawwantsin17 wrote:
| They are doomed. Anything that bets on React is doomed. So
| much wasted money could go to revitalizing the world. They'll
| lose all of it on nonsense no developer asked for.
| FBISurveillance wrote:
| Because when the sun is shining, you go make hay.
| asaddhamani wrote:
| Is it just me or have rounds been getting much larger these
| days?
| tata71 wrote:
| Investors always buy when there is blood in the streets.
| carnitine wrote:
| But the current environment is about as far from blood in
| the streets as is possible. ATHs for practically
| everything.
| ryanSrich wrote:
| They've been ballooning for years. Seed rounds are now
| $3-$10m, A rounds are $20-$50m, etc.
|
| The amount of money flowing into venture capital is
| unprecedented. I run a startup that raised a seed round in
| June. I'm a co-founder but I'm our CTO, not CEO and I still
| get 5-10 emails per day from random VCs asking if we need
| funding.
|
| There's no way this ends well. But I think it'll take a
| decade to shake out.
| MadeThisToReply wrote:
| > There's no way this ends well
|
| How do you think it will end?
| cj wrote:
| Not the original poster, but economies work in cycles...
| so eventually money won't be free, and funding won't be
| so easy.
|
| When that happens, lots of VC-fueled companies will shut
| down.
|
| In other words, I think it ends with a return to a
| funding climate similar to 2015-2016 where money was
| available, but money also wasn't free. And financing
| rounds were smaller.
| randomsilence wrote:
| Aren't we close to an abundance of energy and thus a huge
| expansion of the economy?
|
| There will be much more resources that can be bought with
| money, so money will be worth more, compensating for any
| bubble that is created right now.
| ewuhic wrote:
| How much of a networking does one have to do to achieve
| such a number? And is your product past MVP?
| vmception wrote:
| you have to look like money in the environment you are
| raising capital in, in which case the networking is more
| fruitful and your company can be more flimsy.
|
| if you have a different physical look or unfamiliar
| background, the metrics for your existing company are way
| more important and the bar is much much higher and the
| multiples investors accept are way way lower.
|
| or just do a crypto version, which is much more
| inclusive, global, faster, and leapfrogs this rodeo.
| [deleted]
| ryanSrich wrote:
| My co-founder and I ran a startup before this, which was
| also VC-backed, so we had around 6+ years of networking
| built up from that. You meet hundreds of VCs along the
| way. So it was never an issue of finding investment for
| this new venture. It was finding the right investors.
|
| We raised our pre-seed round in 2020 without anything,
| just a pitch deck, and fully remote. We didn't meet our
| investors in person until several months after closing on
| the round.
|
| We raised our Seed this June based on having roughly 100
| companies using our product, a good percentage paying us.
| So while I wouldn't say we raised our Seed round with
| PMF, we were (and are) showing signs of PMF.
|
| So yeah, our product is a bit past the MVP stage, but not
| by much. We still have bugs that come up almost every
| day, and we fix them as fast as we can. However, the
| product has matured greatly in the last six months.
| ewuhic wrote:
| And what does the "right innvestors" mean in this
| context, if, I assume, the thickness of the wallet is not
| an issue here?
| ryanSrich wrote:
| It's a few things.
|
| - positive reputation. Other founders enjoyed their
| experience.
|
| - provide value through their network. This is the
| foundation YC built themselves on. Investors that
| introduce you to paying customers, other founders, other
| investors, etc.
|
| - leave you alone and only help when you ask for it.
| These are the best types of investors. They provide
| advice only when you ask.
|
| Those are the most important things.
| bhouston wrote:
| I guess because they can? They must have phenomenal growth
| numbers.
| idkwhoiam wrote:
| IMO this is .com bubble v2 in the making
|
| Edit: grammar
| lghh wrote:
| Why do you say that?
| missedthecue wrote:
| Pets.com, the poster child of dotcom era excess, IPO'd at a
| $290 million valuation, and never had a market cap that
| exceeded $1 billion.
|
| Today there three or four companies in the EV space alone
| that are either outright universally known frauds (Nikola) or
| where senior management has told investors that they will run
| out of money before ever making a product. Yet they all have
| billion dollar+ market caps (Workhorse, Lordstown, etc...)
|
| Rivian, Tesla, and Lucid do have products but are worth $1.3
| trillion together. What do you call that if not insanity?
| lwb wrote:
| What do public EV markets have to do with private PaaS VC
| investments?
|
| You would have a case if Vercel has no revenue, or no
| chance of becoming profitable. I don't know their numbers,
| and I'm sure the multiple is high, but relating this to EVs
| is a non-sequitur.
| missedthecue wrote:
| EVs are also venture funded startups, and the excess is
| more obvious there than in an obscure PaaS company. But
| still, two $100 million rounds within months of each
| other, as Vercel has done, is pretty outside of the norm.
| 1270018080 wrote:
| Fixation on vehicle companies isn't really relevant here.
| jSherz wrote:
| Take careful notice of the restriction hidden behind an "i" icon
| on https://vercel.com/pricing that you can have max 10 users on
| the Pro plan before your frontend team has to have a sheepish
| conversation about how much the Enterprise tier is.
| ushakov wrote:
| also you can't use the free tier for any commercial activities
| goatherders wrote:
| NOt sure I understand how anyone could have a problem with
| that.
| erebearalte wrote:
| I actually once switched to netlify cause their free tier
| allows commercial sites, the websites i made in this
| situation are pretty local and small and I doubt vercel
| would even notice but it was easier to just switch to
| netlify than research all the reasons why those websites
| can be considered commercial.
| ushakov wrote:
| non-profits?
| archeroed wrote:
| I read earlier today on their website that they were
| offering free plans to open source projects, aybe they
| also do it for non profit
| leerob wrote:
| Correct, we support a number of non-profits as well.
| tomnipotent wrote:
| Ten front-end engineers will probably cover 95% of businesses
| out there, and at that point it's not a difficult conversation
| to have any more than asking for PyCharm licenses.
|
| They could totally replace the icon with just a (Max 10).
| jSherz wrote:
| I have no quarms with tiers of pricing or restrictions, if
| that information is presented clearly. The current UI feels
| like a sneaky dark pattern.
| rustc wrote:
| Is the bandwidth pricing also really so high after you hit the
| 1TB limit? It shows $20 for the first TB, then $55/100GB.
| That's a 27.5x increase while other cloud services reduce the
| prices on higher tiers.
| Aeolun wrote:
| $20 for the first TB is already expensive.
| detaro wrote:
| oof, that's ugly to hide like that.
| tomrod wrote:
| Indeed.
|
| Hey enterprise sales folks. If you want me to use your
| enterprise services, post your prices.
|
| We're all adults here. If I can't afford your offering and
| you still want my business, we can work out a discount.
|
| If you're going to make me hop through hoops to find or
| determine pricing, you go directly to the bottom of my
| comparison list, and possibly leave it altogether. If you're
| truly the only option in market you _might_ make it if I
| can't afford to build your service.
|
| Stop foggy pricing. We've known since at least 2013 this is a
| bad economic practice.
|
| [0] Miravete, E.J., 2013. Competition and the use of foggy
| pricing. American Economic Journal: Microeconomics, 5(1),
| pp.194-216.
| webdeployer wrote:
| Can't fleece you for as much as possible if you know the
| pricing ahead of time
| ushakov wrote:
| that's not how enterprise sales work
|
| if you want _them_ to have your business, then you have to
| post _your budget_
|
| it's a great way to filter out orgs that have no money to
| begin with
|
| and big businesses might be paranoid about their
| competitors knowing their costs
| tomrod wrote:
| > if you want their business, then you have to post your
| budget
|
| Getting someone's business means they are paying you.
| tomrod wrote:
| Note: parent comment to my comment stealth edited, in
| case anyone else noted the difference in quote and
| comment.
|
| Point understood regardless. Basically enterprise sales
| are unwilling to sell a product, would prefer to sell an
| associated labor cost.
|
| My prioritization remains though. If you obfuscate price,
| I want as little to do with your product as possible.
| ushakov wrote:
| it might look like a terrible practice, but in reality it
| actually is a funnel
|
| if you don't have serious money lined up (typically 5-6
| numbers _minimum_ ) sales won't bother with you anyways
|
| sometimes pricing can't be easily calculated and there
| might be many factors and even some custom agreements in
| place (like SLAs), which do add up the cost substantially
|
| in my own projects, however i always list minimum
| commitment for every tier
|
| but only because i don't have enterprise sales team
| tootie wrote:
| That's usually not really practical. Even businesses that
| have transparent pricing by usage still have enterprise
| sales teams and their customers always want to negotiate.
| Usage patterns are all unique. Sometimes you can offer non-
| monetary value like case studies, beta testing, or some
| sort of in-kind service. You can trade on commitment times
| versus price per transaction or price per user or whatever.
| There's no easy way around it.
| [deleted]
| tomrod wrote:
| A top comment from reddit's sysadmin forum that is
| apropos:
|
| > If SpaceX can list pricing for launching a payload into
| space on their website, you can do the same for your
| [...] software.
|
| If I want to use your software as-is without access to
| your developers to prioritize features, there isn't a
| need for "enterprise" approaches.
| tootie wrote:
| Like I said, even places that list prices want you to
| negotiate. The list prices above a certain threshold are
| typically higher than most enterprises are actually
| paying because the get discounts in exchange for
| commitments or other considerations. True of all the
| public cloud providers.
| cryptica wrote:
| No wonder the US dollar is about to hyperinflate. They're
| printing it like crazy and handing it out to speculative projects
| whose clients' revenues are also all denominated in worthless
| USD.
|
| USD has become a liability for the world. The only reason China
| doesn't dump all their USD reserves is because they know the
| global economy will pop instantly because there's no real value
| behind it to support such big, unfairly distributed numbers in
| the pockets of so many unproductive people. The world is simply
| afraid of what comes next but they will have to face it
| regardless because time is running out and citizens of the world
| are tired of propping up this fiat pyramid scheme.
| robjan wrote:
| If the USD is hyperinflating then pretty much every other
| currency is also hyperinflating too. Check the other major
| currencies like Euro, GBP and JPY. The US Dollar is actually
| strengthening against these currencies and these countries
| don't have enourmous USD reserves.
| cryptica wrote:
| All reserve banks print to maintain a stable exchange rate so
| they will naturally all hyperinflate together. EU governments
| are dumping a lot of euros on grants for useless speculative
| tech projects which have no chance of delivering anything of
| value. It's infuriating to be part of this system. Then
| people wonder why many don't trust the media or vaccines...
|
| That said, I don't understand why the fiat exchange rates are
| stable (USD even coming out ahead as you say) but inflation
| is not even. In Europe, I'm not seeing any noticeable
| inflation in consumer goods but apparently consumer goods
| inflation is very noticeable in the US... But you'd think
| this uneven inflation should affect exchange rates. Why can't
| Americans get the same price for the same product as
| Europeans can? That should be a major arbitrage opportunity.
|
| IMO, there is some serious manipulation going on here to prop
| up the USD and this may be what is causing the inflation and
| shortages in spite of stable exchange rates.
| machiaweliczny wrote:
| What, EU has big inflation problem as well. The real
| economy problems might start Feb 2022 from China according
| to Cathie Wood. I think investor know and rush to IPOs till
| the sun is shining.
|
| Also agree that EU does distribution wrong way. It would be
| better if they simply gave more cash to extend reach of
| already succesful companies, maybe. Or just sane law to
| fund startups via shares EU wide.
| tibiahurried wrote:
| Isn't already super trivial to get a nodejs app and running in
| not time on AWS or GCP? Why would I pay for this?
| rudian wrote:
| Sounds like you never used Vercel now AWS. I wouldn't call AWS
| "super trivial" nor is Vercel equivalent.
| abxytg wrote:
| "Isn't already super trivial to get a nodejs app and running"
| No. Hosting a node server on a bare metal vps is not "trivial".
| You need to deal with routing, auth, etc and that's even before
| you get a user on a different continent.
|
| I think its a worthy exercise for new programmers but IMO there
| is 0 reason to waste the time and mental overhead. Im sure we
| all have about 6 projects languishing because we dont want to
| ssh into an instance and remember what the hell is going on in
| there. Maybe just me.
| malthaus wrote:
| For me as a casual observer of the space, the 2.5bn valuation
| seems mind-boggling. How?
| ratww wrote:
| Netlify is also at 2bn [1]
|
| I think it makes complete sense. There's a lot of room to grow
| in this space. There's a lot of money going into tech salaries,
| and even then it's hard to find people. Anything that saves
| developer time and saves companies from having teams to build
| and manage cloud infrastructure is honestly very promising.
|
| [1] https://pitchbook.com/newsletter/netlify-
| captures-2b-valuati...
| [deleted]
| machiaweliczny wrote:
| I am most intrigued by Calendly valuation and their game plan.
| zild3d wrote:
| Don't know specific growth numbers, but vercel is winning a lot
| of mindshare in frontend land
|
| see nextjs repo: https://github.com/vercel/next.js/
|
| and for frontend infra, vercel is a pretty great developer
| experience. Just hookup your github repo and on commit its
| deployed, behind CDN, preview branch URLs, etc
| jmacd wrote:
| I wonder how much of this round is secondary purchases of common
| stock from the founders. I would guess it's a pretty significant
| amount.
| eoinboylan wrote:
| Employee's get in on secondaries also.
| jmacd wrote:
| They do! My comment wasn't meant to be cynical. I'm just
| assuming the majority of a secondary would be to the
| founders.
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