Developer Productivity Engineering Blog

4 Reasons Why Venture Capital is Flowing into Developer Productivity Engineering Solutions

Gradle Inc. announced recently that it closed a $27 million Series C funding round doubling its venture capital investment haul to almost $55 million. This round represents a significant endorsement by the venture community of the emerging software practice called Developer Productivity Engineering (DPE). DPE takes an engineering approach — rather than a people management approach — to solving developer productivity challenges and improving the developer experience. 

Gradle Enterprise is positioned as a key enabling technology for DPE and the only technology that provides an end-to-end solution. To date venture firms investing in DPE include Bain Capital Partners, DCVC, Harmony Partners, Triangle Peak Partners, StepStone Group, and True Ventures. 

What does the smart money see in DPE?

1. A Huge Market

It has been said that every successful 21st century company is a software company. This means that the speed and efficiency in which quality software is delivered at scale is the key success factor for most enterprises moving forward. As a result, solutions that make software developers more productive (and happy as a result) are essential. Venture Capital firms look for companies they are convinced can address massive markets. Gradle Inc. estimates that the Total Addressable Market (TAM) for developer seats utilizing DPE tools to be $59.1 billion by 2023 based on software developer firmographic data from Evans Research.

2. Strategic Impact

Early results from a survey being conducted by TechValidate shows that 75% IT organizations agree that DPE will become a de facto industry-standard software practice much like Agile and DevOps (TVID: EEE-3AE-6A7). Not only does it promise to deliver step-function increases in developer productivity, but the resulting improvement in the developer experience and morale aids in the high stakes war for talent. Finally, there is a direct alignment between DPE metrics (e.g., average build and test time, mean-time-to-resolve build and test failures, baseline versus actual performance trends/regressions, etc.) and executive metrics like TTM, quality, and cost. Perhaps most importantly, because DPE enables organizations to outcompete by using software engineering resources more productively and being faster to market, it is viewed by most early adopters as pivotal in winning the race to digital transformation.

3. A proven solution

In earlier stage funding rounds (e.g., Series A), venture firms invest in companies whose primary goal is to determine “product fit.” These are companies with product concepts or version 1 products with unproven value propositions. In contrast, the later Series C stage of investment focuses on companies with a proven solution that has achieved “product fit” and are ready to scale their growth. That is why Series C is often referred to as the “growth round.” Elite development teams from many of the most valuable technology and global business brands already depend on the Gradle Enterprise DPE software platform. The solution has been “proven” to improve the delivery speed of quality software at scale at companies like ASML, eBay, Fitbit, LinkedIn, Microsoft, Pinterest, Salesforce, Square and Twitter. The Series C investment in Gradle Inc. is a signal that the venture community believes that DPE is poised to rapidly expand its footprint within across industries, and to more late- and early-majority technology adopters.

4. A Solution to a really hard problem

Venture firms like to invest in companies that address very difficult problems because that translates into customer and, in turn, company value. Addressing developer productivity challenges and pain points is very complex. For example, solutions that effectively help dev teams determine the root cause of a build failure —in an environment with ever expanding growth in the number of distributed developers, modules, and repositories — is very difficult. The Gradle Enterprise Solution for DPE solves a number of complex problems relating to, for example, build and test performance regressions, flaky test detection, and avoidable toolchain failures and reliability issues.

Conclusion: DPE is poised to go mainstream

DPE represents a massive market opportunity that will continue to attract investors. Proven solutions with the potential to solve really hard developer productivity problems while having a strategic impact bode well for DPEs chances of being the next big thing in software development.