Ben Uretsky, the chief executive of a cloud computing start-up called DigitalOcean, uttered what may be the ultimate Silicon Valley “humblebrag†when he explained why his company had to raise millions from venture capitalists just months after an earlier financing round.
“The challenge was the rate of growth kept increasing,†Mr. Uretsky said in an interview.
That prodigious growth was enough to entice Andreessen Horowitz, one of Silicon Valley’s most prominent venture capital firms, to lead a $37.2 million financing round in DigitalOcean, according to an announcement on Thursday. The start-up previously announced a $3.2 million round in August.
DigitalOcean - in the business of setting up virtual computer servers, partitioning them into slices and selling those slices by the month or the hour - now has more than 100,000 customers, it says. It had just 2,000 at the start of last year.
Its industry is dominated by giants like Amazon, IBM and Microsoft that sell server time to corporations. But DigitalOcean tries to stand out by focusing on smaller customers, like individual developers, and putting an emphasis on simplicity.
The company tries in particular to appeal to young start-ups, allowing its customers to rent access to servers by the hour, at rates as low as seven-tenths of a penny.
“Before we came along, there was really no one else that occupied that space and was focused on the experience that a user would get,†Mr. Uretsky said.
The company, which introduced its cloud service in 2012, became profitable in the second half of last year, Mr. Uretsky said. He declined to say its valuation with the new financing.
Though it lacks the dominance of Amazon Web Services, DigitalOcean does have some well-known clients, including the singer Beyoncé, whose website it runs. The start-up also has done work with Nike and the eyeglass company Warby Parker, Mr. Uretsky said.
The new money, which the company plans to use to build new data centers and hire more employees, came after DigitalOcean wrote up a “wish list†of investors, Mr. Uretsky said. But not all the meetings went as hoped.
“Ninety percent of investors have a hard time believing the story,†Mr. Uretsky said. “It’s one thing when that happens during the seed round. It’s a completely different thing when you have 100,000 customers and you’re growing like wildfire and investors are still having a hard time believing the story.â€
The company clearly hit it off with Andreessen Horowitz. Though the venture capital firm tends to focus on companies located in Silicon Valley, it made an exception for DigitalOcean, which is based in Manhattan.
“It requires a very special company to go do something outside the Valley,†Peter Levine, a partner at Andreessen Horowitz, said in an interview. “This is one of those.â€
