Devs often rely on local environments — i.e. their laptops — to write, build and test code before shipping it to a cloud service to integrate and deploy it. There’s nothing wrong with that approach. But local development can introduce challenges, like conflicts between dev environments and, in the worst case, security exploits.
The usability issues with local dev environments are one reason that cloud development environments (CDEs), which provide a range of remotely hosted software development tooling, have gained clout in recent years. Gartner predicts that by 2026, 60% of cloud workloads will be built and deployed using CDEs.
One vendor relatively early to the CDE market was Coder, which provides preconfigured, geared-toward-the-enterprise cloud environments for developer use cases. Ahead of a large expansion to its platform, Coder announced that it has closed a $35 million funding round — an extension to its Series B — led by Georgian with participation from Uncork Capital, Notable Capital and Redpoint Ventures.
Coder’s co-founders, Ammar Bandukwala, Kyle Carberry and John Andrew Entwistle, met online while in high school, brought together by a shared interest in creating Minecraft plug-ins and servers. To make their video game modding easier, the friends created an open source tool to develop software remotely via a browser, tapping Microsoft’s Visual Studio Code IDE.
Bandukwala, Carberry and Entwistle launched Coder shortly after (in 2017), and the tool became the startup’s first product.
“For Coder, the broader slowdown in tech has been an accelerant,” said Rob Whiteley, Coder’s CEO, who joined the company following Entwistle’s departure in 2021. (Bandukwala and Carberry still serve as co-CTOs.) “Companies have been forced to look inward with a ‘do more with less’ mantra, seeking to understand how to retain their best talent and operate more efficiently without sacrificing velocity and security.”
Coder offers free, open source software for platform and dev teams to migrate dev environments and source code from local machines to cloud infrastructure. The software is self-hosted and self-managed, and it works across multiple clouds, delivering capabilities such as role-based access controls and end-to-end encryption.
Coder makes money by charging for Coder Enterprise, a self-hosted version of its open source software with additional governance and user management features.
“Platform teams have complete control over where Coder is hosted and the services that Coder uses,” Whiteley said. “By centralizing previously decentralized development environments, enterprises maintain better control and governance over their source code and IP.”
The sales pitch appears to be resonating.
Coder’s open source software has around 1.2 million monthly active users, and Dropbox, Discord and Skydio are among the company’s paying customers (as well as four unnamed U.S. intelligence agencies). Revenue doubled last year, meanwhile, and Whiteley expects that it’ll double again in 2024, as Coder expands its client footprint in Europe, the Middle East and Africa.
“By 2025, 30% of large enterprises will use cloud development environments to streamline development workflows and enable better manageability, and by 2027, 40% of organizations in highly regulated verticals will mandate cloud development environments,” Whiteley added, citing Gartner data.
With nearly $80 million in the bank and a workforce of just over 50 people, the Austin, Texas-based company plans to grow globally, invest in its open source tooling with a dedicated developer relations team and expand its sales, marketing, support and engineering orgs, Whiteley said.
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