Rancher Labs announced a $20 million Series B round of funding, bringing total financing to date to $30 million. The funding round was led by GRC SinoGreen and included the participation of Mayfield and Nexus Venture Partners
Rancher Labs officially started up in September 2014 and raised $10 million in its initial funding round in June 2015. The Rancher 1.0 release debuted on March 29, bringing with it enterprise stability and platform general availability. Rancher provides a full enterprise-level platform for managing containers.
"This spring, the opportunity arose to raise another round of funding, and we jumped at it," Shannon Williams, co-founder of Rancher Labs, told eWEEK. "It allows us to expand the business on the sales and marketing front, as well as engineering."
The new funding will help the company to move to the next level and build on the momentum of the Rancher 1.0 release, Williams said. With the increasing number of vendors and projects in the container management space, Rancher Labs needed to have the appropriate level of funding so that it can compete effectively in the marketplace, he added.
On May 9, CoreOS which also provides a container platform, announced a $28 million Series B round of funding.
Mayfield and Nexus Venture Partners invested in Rancher Labs' Series A and Series B funding. Taiwan-based GRC SinoGreen is the new investor for the Series B financing.
Rancher Labs is seeing a lot of demand in Asia, and as such, it was important to have investor backing from that part of the world, Williams said. "It's very interesting to see the wide interest in containers around the world," Williams said. "Since there is a very low barrier to entry for containers, we're seeing it adopted uniformly around the world."
In terms of how Rancher Labs and its investors determined that $20 million was the right amount to raise, Williams explained that a Series B round of funding is all about helping the company reach the next milestone in its evolution. A Series A is about helping drive early market adoption and moving from an idea to the first dozen or so customers and proving the technology. Series B funding is about taking the step from individual proof points to market proof points such that customer success can be repeatable broadly, he added.
"You don't want to raise too much [that] you're wasteful and get too far ahead of revenue," Williams said "You also don't want to raise too little, so you can't achieve the next milestone."
Williams said that $20 million felt like the right number for Rancher Labs based on where the company is already with revenue.
As the adoption of Rancher 1.0 release is growing, the market is also maturing and there is more need for increased scale and container management capabilities to help continue the company's growth, Williams said. "For a lot of products, what happens between a 1.0 release and a 2.0 release is you go from a really great proof point to thinking about how to grow a broader platform," Williams said.
Sean Michael Kerner is a senior editor at eWEEK and InternetNews.com. Follow him on Twitter @TechJournalist.