Cloud computing has revolutionised the technology sector, offering a huge range of benefits to organisations of every size. However, Swiss start-up LocalStack, which is today unveiling the details of a successful $25 million Series A fundraising round, has won something of a cult following by helping to address one of the downsides of the move to cloud.
First launched in 2017, LocalStack is aimed at developers building and testing apps and other software for deployment in the cloud. The problem for this group is that these apps also need to be tested in the cloud – and then iterated and retested – but this can be a frustrating experience. The cycle of constantly pushing new versions of an app to the cloud adds significant time and expense to the development process.
LocalStack’s solution is a platform that replicates AWS’s cloud environment on individual developers’ own laptops. This makes it possible for them to move the whole testing cycle on to their own machines, eliminating the frictions of cloud-based testing and providing an isolated environment in which apps can be continuously updated and iterated.
“Our platform fundamentally transforms the developer experience by enabling teams to test locally, cutting deployment times from 28 minutes to 24 seconds while significantly reducing AWS spend,” says Waldemar Hummer, co-founder and co-CEO of LocalStack. “We’re putting control back in developers’ hands, giving them the flexibility and speed they need to innovate.”
LocalStack started out as an open-source project, but quickly gained traction with communities such as GitHub – not least after winning praise from AWS itself. The company introduced a number of paid-for options to the platform in 2019 before launching an enterprise version in 2020. The latest version supports more than 100 AWS services, replicating the actual cloud environment that developers would otherwise have to use.
Today, the company serves around 8 million users each week and has signed up more than 900 paying customers, with many more still exploiting LocalStack’s free-to-use functionality. “We’ve signed up enterprises of all sizes from a wide range of industries,” says Gerta Sheganaku, co-founder and co-CEO. “Many of those enterprises are focused simply on accelerating their development cycles, but we also have a significant number of customers from regulated industries who value the isolated nature of our solution.”
Kevin Breton, vice president of engineering at KnowBe4, one LocalStack customer, says the platform has substantially accelerated its development cycles. “While in the past we had to maintain our own tooling and local mocks, with LocalStack we can now empower our developers s to iterate quickly without having to perform numerous code commits or to wait for AWS pipelines – hence also saving money on infrastructure,” he says. “LocalStack has been a game changer in terms of development speed and efficiency for our team.”
Growth to date has largely been achieved through word-of-mouth rather than an outbound sales effort. The company’s Series A round will therefore enable it to step up its commercialisation with investment in sales and marketing teams, as well as support staff for those functions. Sheganaku says the company is particularly keen to convert many of the large enterprises currently using the basic functionality of the platform into paying customers.
LocalStack will also use the proceeds of the round to invest in further product development as it evolves towards a multi-cloud offering rather than operating as an AWS emulator. It has already launched a platform for users of Snowflake, the data-focused cloud provider, and is working towards a product offering for developers who work with Microsoft’s Azure.
Today’s round builds on the $3.2 million seed raise that LocalStack completed in 2021. The $25 million Series A found is led by Notable Capital, with participation from existing investors CRV and Heavybit.
“LocalStack stands out for its rare combination of bottom-up developer love and clear enterprise value,” says Glenn Solomon, managing partner at Notable Capital. “[It] has built a vibrant community alongside its rapidly growing enterprise customer base. While LocalStack has established itself as the de facto standard for AWS local development, its recent preview release for Snowflake showcases its broader vision to revolutionise cloud development across all major platforms.”
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