DigitalOcean Gets a Tidal Wave of New Funding

DigitalOcean has been noted for its remarkable growth over the past 24 months. The cloud provider has literally come out of nowhere to become one of the top cloud companies for developers. DigitalOcean’s success can be attributed to their easy to understand pricing model as well as their cloud’s overall performance versus their competitors. It is not surprising that DigitalOcean recently landed over $37M in funding to build out additional cloud infrastructure.

Back in 2013, DigitalOcean was noted by many industry research firms as being one of the fastest growing cloud services on the web. In fact, it was estimated that DigitalOcean was spinning up more boxes than AWS. This rapid expansion of cloud services is why Andreessen Horowitz has invested such a large sum of money in this company. Ben Uretsky, the chief exec at DigitalOcean was quoted as saying, “The challenge was the rate of growth kept increasing.”

Analysts note that the beginning of 2013, DigitalOcean had about 2,000 clients. This number has swelled to over 100,000 clients as of today. The business model for DigitalOcean has been quite simple. They sell cloud computing by the hour with rates that go as low as 1/10th of a cent in pricing. In relation to DigitalOcean’s success, Uretsky went on to say, “Before we came along, there was really no one else that occupied that space and was focused on the experience that a user would get.”

DigitalOcean will also use this investment to hire on more cloud engineers. Uretsky said that he approached his investors with what he noted as a “Wish list” which comprised of new servers, more employees and so on. Uretsky mentions that he didn’t get all of things he wanted but he did insinuate that he and the investors found a happy compromise. DigitalOcean isn’t a typical Andreessen Horowitz investment. The firm typically sticks to Silicon Valley companies. DigitalOcean is based in Manhattan, NY and Andreessen Horowitz partner Peter Levine noted that DigitalOcean was a “Special company.” Most analysts agree that DigitalOcean’s meteoric rise is something special and other cloud entrepreneurs should take note.