Cloud computing startup DigitalOcean raises $37.2 million in funding

Posted Mar 7, 2014

DigitalOcean is a cloud hosting company that has raised $37.2 million in funding led by Andreessen Horowitz. Previous investors IA Ventures and CrunchFund also participated in this round.

“DigitalOcean’s growth has been explosive over the last 12 months,” stated Ben Uretsky, CEO and cofounder at DigitalOcean. “This funding will allow us to attract top engineering talent, build new datacenter locations, and continue our relentless focus on simplicity.”

DigitalOcean started in 2011 and has raised a total of $40.4 million. The company works with companies like Nike, Warby Parker, and TaskRabbit and has around 180,000 developers that use their services. At the start of last year, the company had around 2,000 customers.

One of DigitalOcean’s strengths is that they offer a low-cost starting plan. Customers can access servers by the hour at rates that are as low as seven-tenths of a penny. DigitalOcean became profitable at the second half of last year.

DigitalOcean plans to use the funding for hiring additional talent and expanding their infrastructure. DigitalOcean is expected to offer IPv6, which is an updated version of their API in the near future.

In an interview with PULSE 2.0, Uretsky said that the company has spun up over a million virtual servers and Netcraft reported DigitalOcean is the world’s fastest cloud provider.

Despite being very popular with indie developers, I asked Uretsky if there are plans to work with larger enterprises in the future. He said: “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.”