Docker appeared to be on the verge of collapse not long ago. It opted to focus only on a developer audience with a collection of commercial and open-source tools in 2019 after selling its enterprise business. It was a significant gamble for a six-year-old corporation to sell off the most profitable element of its business and radically change its emphasis. Only two years after deciding to reorganize, the firm stated that annual recurring revenue (ARR) had increased fourfold to more than $50 million. On a $2.1 billion valuation, the business announced a $105 million Series C investment today.
CEO Scott Johnston, who has worked for the firm in various positions for years, put a bold gamble on the developer community, and it has paid off handsomely for him, as he has been able to construct a profitable business model since the reorganization. “It wasn’t clear whether we could take all of that and redo the product strategy we needed to go to market, redo the company business model successfully — all of that was an open question two and a half years ago, while we had this product that developers loved; while we had popular upstream open source assets and a known brand,” Johnston said.
“We’re glad we’re still here two and a half years later. “We didn’t always make ideal judgments or bets, but most of our bets have paid off, and the solutions we’re shipping are benefitting developers,” he added. Furthermore, at a time when investment looks to be decreasing, Johnston claims that investors came to him, that he had plenty of opportunities, and that he could have earned much more if he had wanted it. “It was uninvited, and we had the option to decline.” We had a number of term sheets to choose from, all of which were competitive. And we could have raised a lot more than the 105 dollars we did. As a result, we’re quite lucky to have the option.”
He feels that, in addition to being a well-known brand with a popular open-source component among developers, the developer tool industry has enormous potential, especially as the demand for apps grows. Investor interest in this round was sparked by a combination of those two reasons, according to him. When the firm reorganized in 2019, it reduced its workforce to 70 individuals. It already has over 150 workers, with plans to increase that number in the coming year. As the firm grows, Johnston says they have strict KPIs in place to ensure a diverse staff.
“As a result, we have an internal KPI, or key performance indicator, that measures diversity. We have it at the corporate level, but every one of the managers, the executives for their respective duties, are also on it. “And, to put a figure on it, that’s a number we have to discuss with the board as well,” he said. He stated that this is something they look at on a weekly basis. “We have a weekly roll-up of our progress in our hiring and recruiting funnel, and that weekly recruitment includes an explicit diversity statistic.” So, you know, it all comes down to why right? That’s because diverse teams perform better. It’s better not just from a human perspective, but also, to be honest, from a capitalist performance one. So we firmly believe it, and in order to put that conviction into action, we hold ourselves statistically accountable,” he explained.
With participation from Atlassian Ventures, Citi Ventures, Vertex Ventures, and Four Rivers, as well as previous investors Benchmark Capital, Insight Partners, and Tribe Capital, today’s investment was headed by new investor Bain Capital Ventures. On that $2.1 billion value, the business has raised $163 million in its current form. Under the terms of the agreement, Bain’s Enrique Salem will join the Docker board of directors.