Open source monetization startup Tidelift raises $25m series B

The curse of open source software is that it is used in pretty much every application and device on the planet, and yet, has pretty much no business model. Sustaining open source is a critical problem for the future of software, because without a durable source of income, the developers behind these critical projects cannot invest their full energies to improve, maintain, and secure them.

Tidelift, a startup founded by a group of long-time open source engineers and executives, has taken on the problem in a compelling way. As I wrote about them last year as part of a deep dive into open source sustainability:

Tidelift is designed to offer assurances “around areas like security, licensing, and maintenance of software,” [Tidelift CEO Donald] Fischer explained. The idea has its genesis in Red Hat, which commercialized Linux. The idea is that companies are willing to pay for open source when they can receive guarantees around issues like critical vulnerabilities and long-term support. In addition, Tidelift handles the mundane tasks of setting up open source for commercialization such as handling licensing issues.

That’s pretty much still the mission of the company, and now it has even more resources to grow. The company announced today that it has raised $25 million in Series B financing led by return backers General Catalyst, Foundry Group, and Matthew Szulik, the former chairman and CEO of open source leader Red Hat, which was acquired by IBM last year in a blockbuster $34 billion deal. That’s a follow-up to a $15 million Series A round last year.

Since I covered Tidelift last June, the company has expanded from its initial launch in the Javascript ecosystem to also offer assurances to packages within the Java, Python, PHP, .NET, and Ruby ecosystems. Among the well-known open-source projects covered under the Tidelift Subscription today are Apache Struts, Vue.js, Gulp, Carbon, Jekyll, Beautiful Soup, and Mongoose. Tidelift says that its subscription now cover hundreds of open source packages.

In addition to covering more packages, Tidelift announced last September that they had reached $1 million in open source maintainer commitments. In a press release, the company highlighted community and discussion platform Discourse as a customer.

CEO Fischer told me that “Our bottom line is that open source doesn’t just need ‘funding.’ It needs a business model that works for creators and users alike, at massive scale.” The company intends to use the new funding to further expand its coverage of popular open source packages and partner with more open source creators.

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