Gatsby, Website-Building Startup Backed By Index Ventures, Raises $28 Million
by David Jeans
At a time when the Covid-19 pandemic is forcing businesses to reinforce their online presence, one website-building startup aiming to rival companies ranging from Squarespace to Google is now valued more than $200 million after a funding round led by Index Ventures.
Berkeley-based Gatsby, which launched a platform last year to provide a suite of tools for website and app development, raised $28 million in a recent series B funding round, the company tells Forbes. In addition to Index, investors CRV and Trinity Ventures also joined the latest round.
The demand for cloud-based website and app development services has spiked as the Covid-19 pandemic has driven offline businesses — particularly brick and mortar retailers — to build an online presence. Website-builder and e-commerce platform Wix reported 24% revenue growth for the first quarter of 2020 to $216 million after adding almost 7 million new subscriptions. Earlier this month, online-business platform Shopify briefly became Canada’s most valuable company after its share price surged. “As an industry we’ve seen two years of digital transformation in the last two months,” says Shardul Shah, a partner at Index Ventures who led Gatsby’s funding round, echoing comments made by Microsoft CEO Satya Nadella this month.
Gatsby’s website- and app-building platform offers a cross-section of products that span those offered by Squarespace or Wix — which require no knowledge of coding or development — to more complex developer-focused platforms offered by Wordpress, Google, Amazon and Microsoft. “We think of ourselves as the [content management system] for the cloud era,” says CEO and co-founder Kyle Mathews.
Founded in 2017, Gatsby was launched as an open-source platform where developers could use the product to build web apps. Mathews, 35, had launched a string of IT consulting firms and other startups before seeing an opportunity to build an open source platform to help tech startups create their own websites. Since the success of the open source platform, which has more than 90,000 users, the firm launched Gatsby Cloud in November, a paid service with more than 200 enterprise customers — a figure that has doubled in the past month.
With building momentum, Gatsby says it aims to be the platform behind 1% of websites by 2024; it claims it currently supports 0.1%. The enterprise platform is now used by a suite of high-profile customers including Spotify, Capital One and design software firm Figma.
On the back of the recent funding, the firm has joined the ranks of a growing number of cloud-based technology firms that are raising money during a time when entire industries are grinding to a standstill. The Covid-19 pandemic has increased the reliance on firms, like Gatsby, that help bolster online businesses. Last week, online analytics firm Amplitude announced it had reached a $1 billion valuation after raising $50 million.
The latest funding round, which values the company at $218 million, brings Gatsby’s total funding to $46 million, following a series A round in September 2019, which helped the company almost triple in size to 68 employees. Other early investors include Kong CEO Augusto Marietti, Adobe CPO Scott Belsky and venture firms Fathom Capital, Mango Capital and Dig Ventures.
Mathews would not disclose Gatsby’s revenue figures, and says the firm is focused on growth and is not profitable. Looking even further ahead, Mathews says Gatsby aims to become the backbone for 10% of websites and apps by 2030.
It appears to be a lofty goal for a company just getting started. But Shah, the Index partner, who has also led investments in firms including DataDog and Attack IQ, says that the economic impact of recent months has implemented a permanent change for companies to rely on an online presence. “Every offline industry has been forced to go online or out of business.”