- Mattermost — an open source alternative to Slack and Microsoft Teams — announced recently that it raised $50 million in Series B funding led by Y Combinator Continuity
Mattermost — a company that is considered an open source alternative to Slack and Microsoft Teams — recently announced it raised $50 million in Series B funding, which was led by Y Combinator Continuity.
This funding round made Mattermost YC’s largest ever Series B investment and its largest open source investment to date. Existing investor Redpoint and S28 Capital joined this round along with new investor Battery Ventures.
With this round of funding, Mattermost is planning to make open source messaging mainstream. The Mattermost open source messaging platform can be deployed internally at companies via public cloud services like AWS or on-premises. Including this funding round, Mattermost has raised about $73.5 million total. Earlier this year, Mattermost raised $20 million in Series A led by Redpoint.
Mattermost has become a preferred platform for its high security by privacy-conscious enterprises that are seeking to increase productivity and empower technical teams through workplace messaging.
Ian Tien, the CEO of Mattermost, said that this funding round will be used for accelerating community expansion and product development in a new and rapidly growing market.
Tien pointed out that messaging collaboration is becoming as common as email and web conferencing. And he believes that this space is a $30 billion market opportunity with multiple winners. And Y Combinator partner Ali Rowghani told Business Insider that they realized this market was a lot bigger than they thought it was.
The power of open source in recent years has been especially realized by the recent successes of startups like GitLab and Elastic along with IBM’s Red Hat acquisition and Microsoft’s GitHub acquisition.
“Open source is at the heart of our approach to collaboration. It would be virtually impossible to imagine the modern internet, and the countless applications that depend on it, without this new way of building software,” added Tien in a blog post. “Open source brings a new level of innovation, integration, and trust to all the domains it touches, the results of which are seen both in its widespread adoption in the enterprise, and the rise of a new generation of market-leading startups that have open source at their core.”
Mattermost’s open source community has been driving the success of the platform. The community has been translating Mattermost software into 16 languages and they started hundreds of open source projects based on Mattermost. Currently, there are more than a thousand contributors to core Mattermost software. And by word-of-mouth, over 10,000 Mattermost servers are downloaded every month.
Mattermost originally started out as a gaming company known as SpinPunch. But then it decided to pivot as the team was using HipChat (acquired by Slack from Atlassian last year) and that app kept crashing. Tien told Business Insider that they were let down by a collaboration platform that was “mission critical” for them.
Some of Mattermost’s users include Uber, Samsung, and the Department of Defense. These customers are using the platform for its needs involving specialized high compliance domains, high scale, and high-performance deployments, or custom integrations to legacy systems.
