When Stacklet founders Travis Stanfield and Kapil Thangavelu left Capital One in 2020 to launch their startup, most companies weren’t too concerned about containing cloud costs. However, in the following years, as they experienced economic difficulties, first caused by the pandemic and then by rising rates of interest, this became a necessity.
As a result, Stacklet’s cost control and cloud management platform has gained popularity. CEO Stanfield says that while he cannot provide specific numbers, revenue has tripled year-over-year in 2023. Investors apparently liked what they saw and invested $14.5 million to capitalize on continued growth.
TechCrunch’s Frederic Lardinois described the company’s core business product in a 2021 article, showing that cost control is just one a part of the offering:
“Stacklet helps enterprises manage how they manage data across clouds, accounts, policies and regions, focusing on security, cost optimization and regulatory compliance. The service offers its users a set of predefined policy packages that encode best practices for accessing cloud resources, although users can after all also define their very own rules. Additionally, Stacklet offers a range of policy health and asset auditing analytics, as well as real-time inventory logs and change management for a company’s cloud assets.
The company also has a real open source track called Cloud Guardian. The two founders helped develop the software while at Capital One before leaving to launch Stacklet. The project was open sourced in 2016 and became a part of the Cloud Native Computing Foundation in 2019.
In recent years, some open source projects have moved to more restrictive licenses, but Thangavelu says that will not occur with this project because it should endlessly be a part of the CNCF. As for protecting a business product from cannibalization by a free version, he argues that the difference between the two is too great for open source to threaten the company’s core business offering.
“An open source project is a stateless rules engine. It’s just CLI (command line interface). With our commercial product, we provide a platform that helps people accelerate out of the box and provides them with value and additional capabilities that are not available with open source software,” he said.
Stanfield says it has found that the cost control element is particularly vital to customers, which has not all the time been the case. In the company’s early days, most individuals had no idea about FinOps, the name given to manage cloud spending in organizations. However, this has become even more vital in recent years with the growing popularity of artificial intelligence, which is typically resource-intensive.
“Certainly as we continue to develop our own products and services and move deeper into the cloud, they need to have a good handle on their spend, and in the FinOps domain we are fundamentally focused on continuous optimization of utilization – everything that developers can use in the cloud and aligning that with performance best practices ” Stanfield said.
He says that as they proceed to expand, they need to seek out the right balance between growth and efficiency, and they intend to be conservative with their spending even with the latest influx of cash, investing only when it makes sense to assist them speed up.
It’s price noting that this investment is smaller than the previous round in 2021, when the company raised $18 million, but Stanfield says it’s a different time and he’s completely satisfied with that number.
“We feel happy. “We certainly have some really fantastic investors at the table given the economic climate that has been there in recent years,” he told TechCrunch.
Today’s round was led by SineWave VC with participation from Strait Capital, Uncorlated Ventures, Capital One Ventures, Foundation Capital and Relentless Ventures. Stacklet has now raised $36.5 million, in response to the company.