SacStarts - Engine Yard

Engine Yard closes $15M Series B

Adam Kalsey — Sun, 13 Jul 2008 22:01:38 +0000

Locally founded Engine Yard, a provider of Ruby on Rails hosting has closed a series B round of $15 million from New Enterprise Associates, Amazon.com, and existing investor Benchmark Capital. NEA led the round, and partner Peter Sonsini is joining Engine Yard’s board.

The money raised in this Series B will help Engine Yard develop a platform for cloud computing clusters and to continue funding the development of Rubinius and Merb, their open source projects.

In January 2008 the company raised a $3.5 million Series A round from Benchmark Capital. The quick turnaround to a Series B comes because the company wanted to raise money before they needed it, says Engine Yard’s CTO, Tom Mornini. The company’s board was concerned about the tightening market for venture capital, and decided to raise enough cash to carry them for some time.

The company is growing quickly. When we profiled Engine Yard in January of last year, CEO Lance Walley said they had 34 customers. Mornini tells me they currently host more than 400 companies and experienced 40% growth in the first quarter of this year.

With the new funding, Engine Yard plans to start deploying their managed hosting clusters on existing cloud hosting providers. Mornini wasn’t able to say which providers, but with Amazon as an investor, it’s safe to say that EC2 is a likely target.

The addition of Amazon as an investor is an interesting move. Thanks to Amazon’s cloud infrastructure services EC2 and S3, the company is widely seen as a leader in the emerging cloud computing market. They’ve been criticized, however, for not providing uptime guarantees, service level agreements, or managed services. This investment now ties them to a company that’s providing fully managed services for cloud deployments.

The size of Amazon’s investment was not disclosed and neither company is talking about any specific plans for working together.

The company currently hosts their clusters in traditional data centers, placing racks and server hardware in data centers around the country. Mornini says they plan to continue to use this infrastructure for clients that require physical hardware. Many clients, he says, are unwilling to move their data into the cloud, often citing security or regulatory concerns.

Engine Yard secures $3.5 million from Benchmark Capital

Adam Kalsey — Fri, 11 Jan 2008 19:07:58 +0000

Sacramento born Engine Yard has raised $3.5 million in venture funding from Benchmark Capital. The company, now located in San Francisco, still has data centers and several employees in Sacramento.

Engine Yard didn’t start out looking for funding. They are already profitable and didn’t see their Rails hosting and support business as lucrative enough to get the large payouts venture companies often require.

Benchmark Capital came calling after they continued to get pitched by startups that were using Rails as their technology. Benchmark saw that Engine Yard’s technologies might allow then to grow a software business to provide technology to Ruby on Rails startups. Engine Yard is one of the chief supporters of Rubinius, a high performance virtual machine for Ruby, and Merb a Rails-compatible framework that promises higher performance.

Much of the money will be used to accelerate development of these projects. Last month, Engine Yard hired the Rubinius core developers after hiring project lead Evan Phoenix last May. Engine Yard co-founder Ezra Zygmuntowicz is the lead developer of Merb.

This is Engine Yard’s first round of equity financing. They previously closed $2.5 million in lease financing to help build out more data centers.

Engine Yard gets $2.5M, moves to SF

Adam Kalsey — Fri, 30 Nov 2007 19:01:25 +0000

Ruby On Rails hosting provider Engine Yard (see our profile) has announced they’ve taken a large round of lease financing to help them build out their datacenter capacity. The $2.5 million financing will allow Engine Yard to improve their infrastructure, allowing them to add five hosting clusters, including one in Europe.

The company has also moved its headquarters from Sacramento to San Francisco. Although the company hasn’t announced the move, the company address on their web site has recently changed from a Sacramento address to an address in the South Park neighborhood of San Francisco.

EngineYard in GigaOM

Adam Kalsey — Tue, 27 Feb 2007 00:13:55 +0000

GigaOm has an article on Engine Yard’s pricing strategy.

By using the EngineYard service for a few months, developers can judge for themselves how good (and scalable) EngineYard services really are without banking on marketing spiel. The biggest downside of the upgrades is that Engine Yard will have to constantly add more support staff, which means that the cost advantages of running a large cluster could simply vanish.

Despite that, I think that we’re about to see a trend of web2.0 infrastructure services use a similar dual-pronged go-to-market strategy as Engine Yard.

See our previous profile of Engine Yard.

Startup Profile: Engine Yard

Adam Kalsey — Wed, 24 Jan 2007 18:20:36 +0000

Company: Engine Yard
Founded: Early 2006
Founders: Tom Mornini & Lance Walley

Engine Yard provides managed hosting services for Ruby On Rails applications. The early success of Rails-powered sites like Basecamp and the professed ease of developing web apps quickly has led to an explosion of applications written for Ruby on Rails.

Engine Yard simplifies the process of hosting large-scale Ruby on Rails sites and allows developers to concentrate on building and selling their application. By buying “slices” from Engine Yard instead of buying individual servers developers can easily grow their hosting. Have growing traffic and need more capacity? Buy more slices. Engine Yard ensures that your slices are distributed across multiple servers for scalability and reliability.

Founders Tom Mornini and Lance Walley founded a consulting company called Quality Humans in 2002 after being laid off from the wireless startup where they both worked. As Ruby on Rails grew and Quality Humans began doing more Rails consulting, Walley and Mornini saw the need for professional, scalable Rails hosting and Engine Yard was born in early 2006.

Engine Yard was started with $92,000 invested by friends and family and has been bootstrapped from there using revenue from 34 customers, each paying up to $250 per month for each slice they use or $1500 per month for dedicated servers.

Like many web-focused startups, Engine Yard operates as a virtual company. The company address is a rented mailbox in Folsom. The founders and their four employees each work from their homes spread across the country. Each founder resides in the Sacramento area.