Why VCs Have Invested More Than $200M in Container Tech

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ANALYSIS: Last week alone, investors—aiming to profit from the new approach to building, deploying and managing apps—poured $63M into container vendors.

The evolving market for application containers isn’t just about developer adoption anymore; it’s now very much about investors, too.

The week of May 9, in particular, highlights the intense interest that venture capitalists (VCs) have in containers and the potential to profit from the new approach to building, deploying and managing applications at scale.

Over the course of last week, three container vendors raised a combined $63 million in new capital. The biggest funding of the week came from CoreOS, which raised a $28 million round Series B funds. Backers include GV (formerly Google Ventures), Accel, Fuel Capital, Kleiner Perkins Caufield & Byers and Y Combinator Continuity Fund.

Container investment

oracleTotal funding to date for CoreOS—which emerged in the last year to become one of the primary rivals for Docker Inc.—now stands at $48 million.

Rancher Labs, co-founded by executives that had previously founded Cloud.com, raised $20 million in Series B financing. Investors included GRC SinoGreen, Mayfield and Nexus Venture Partners. Total funding to date for Rancher Labs now stands at $30 million. The Rancher platform is a container management and deployment system that uses the Docker container engine.

The third piece of container funding last week came from Weaveworks, which raised $15 million in Series B financing. VCs included GV and Accel. Total funding to date for Weaveworks, which is building a platform for container and microservices networking and visibility, now stands at $20 million

All that investment, however, pales in comparison to what Docker Inc. has already raised—a staggering $95 million in the first part of its Series D round of funding in April 2015, bringing its total funding to more than $150 million. Docker’s investors include Coatue, Goldman Sachs, Northern Trust, Benchmark, Greylock Partners, Sequoia Capital, Trinity Ventures and Jerry Yang’s AME Cloud Ventures.

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First mover

As the first mover in the container space, as the company that has virtually defined the current modern container runtime and packaging formats, it should come as no surprise that Docker Inc. has raised more money than its competitors and partners. It is interesting to note, though, that Docker’s Series B brought in $15 million, which is actually less than what CoreOS or Rancher Labs raised in their respective Series B rounds.

The total funds invested in Docker Inc. ($150 million), CoreOS ($48 million), Rancher Labs ($30 million) and Weaveworks ($20 million) add up to $248 million.

That’s not including others in the ecosystem—like ClusterHQ, which builds the open-source Flocker storage project for containers, that raised a $12 million Series A in February 2015; container security vendor Twistlock, which hasn’t yet announced funding; or a large crop of startups, including new networking startup Tigera, all vying for a slice of the container market.

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