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Exclusive: DevOps unicorn HashiCorp could be valued at $5.25B in new round

A boom among companies moving more software services to the cloud in recent years has led investors to bet on startups that provide operational support for servers and data centers.

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A boom among companies moving more software services to the cloud in recent years has led investors to bet on startups that provide operational support for servers and data centers.

HashiCorp, which provides cloud infrastructure automation services, has seen its fortunes rise steadily the past couple of years amid growing interest in DevOps companies. Looking to ride that wave, HashiCorp has set out to raise new capital that could value the company at $5.25 billion, according to a regulatory filing reviewed by PitchBook.

However, HashiCorp’s filing to authorize the fundraising was made just days before this week’s plunge in the financial markets.

The new round, which would raise an estimated $175 million, would step up the company’s valuation 2.8x over what it received in its last funding in November 2018.

PitchBook was unable to determine if the round has been completed. Representatives for the company didn’t respond to a request for comment.

San Francisco-based HashiCorp is led by David McJannet, a former GitHub marketing executive who took over in 2016 for founding CEO Mitchell Hashimoto. Hashimoto now serves as co-CTO. In 2018, in of the biggest software deals in recent years, GitHub agreed to be acquired by Microsoft for $7.5 billion.

HashiCorp’s latest round follows a $100 million Series D funding led by IVP that valued the company at $1.9 billion post-money. Other investors in that round included GGV Capital, Redpoint Ventures and Bessemer Venture Partners.

Driven by an expanding developer population and scaling organizational focus on application development, companies in the DevOps market raised $6.2 billion in VC funding in 2019 across 360 deals, according to PitchBook. Notable exits in the industry in 2019 included PagerDuty, which provides software to manage outages of tech systems and infrastructure. The company went public last April with an initial market cap of nearly $1.8 billion.

DevOps comprises a variety of specialists including container management and monitoring companies. HashiCorp is among a group of infrastructure companies that provide software developers with tools to manage data centers made up of virtual as well as hardware operations.

Competitors in the space include Sysdig, which secured a $70 million round led by Insight Partners in January that valued the San Francisco-based startup at $480 million. Seattle-based Chef, which caters to customers including Facebook, GM and CapitalOne, last raised a round in 2015, when it brought in a $40 million Series E.

Companies including Pinterest and Hulu use HashiCorp’s open-source tools to manage their cloud-based and physical tech operations. Terraform, a configuration engine developed by HashiCorp helps digital operations management companies such as PagerDuty keep their infrastructure in a single location.

Hashimoto and Armon Dadgar founded HashiCorp in 2012. In February, the company added VMWare veteran Brandon Sweeney as its first chief revenue officer.

Featured image via Arctic-Images/Stone/Getty Images

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    Written by Priyamvada Mathur
    Priyamvada Mathur writes about venture capital at PitchBook.

    She is an Indian chartered accountant and has studied economics and journalism.
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