appsmithLtd., which provides open source software that helps companies build internal applications quickly, this morning announced an $8 million Series A round of funding.
Unlike some upstart tech companies we’ve seen in the internal application market, AppSmith doesn’t sport a no- or low-code approach. Instead, AppSmith targets traditional developers with its service, providing a user-interface component that can be linked to business data sources. Those data-infused interface modules can be combined to create calendars, dashboards, and other apps.
Prior to its Series A round of funding, Epsmith had raised $2.5 million. Canaan led the funding event. Accel and Bessemer participated, among other investors.
When asked why the startup chose that particular lead investor, co-founder and? CEO Abhishek Nayak told Nerdshala that his company had been in touch with Joydeep Bhattacharya of Canaan since its early days and that the investor had experience with internal apps at Microsoft.
Why did Epsmith decide to raise capital now? Per Hero, the growing use of its service and the desire to build its platform to support more use cases – things like mobile – were the motivation.
AppSmith does not offer paid products today. But since it currently offers a hosted version of its open source code, it’s not hard to see where it could turn monetization. Enterprise-specific features would be a more obvious way to generate revenue over time.
Why Open Source?
There has been a trend in recent quarters for startups building open source technologies to raise capital. AppSmith fits neatly into the group.
But, he Why is more interesting. The company told Nerdshala that its co-founders (hero and Nikhil Nandagopal) want AppSmith technology to be part of their customers’ technology stack, and that open source code is the way to achieve that goal. The logic is simple: open source code is at once less prone to viability reversal and is also easier to dig into. Good luck getting the same visibility in proprietary code.
Today, AppSmith’s open source project has more than 100 external contributors.
The AppSmith team emphasized to Nerdshala that feedback from the open source community is useful for making development decisions. And the startup said that by offering a version of its service through open source channels for free, it could serve public-good companies like nonprofits, which may not eventually become paying customers.
Talking about whom, who are the future customers of the company?
Who is AppSmith for?
In the view of the startup, its open source software is suitable for small companies and developers. Its paid products will fit more well as midsize and larger companies roll out.
We’ll see how AppSmith tackles monetization and customer segmentation, two areas of open source business model building that we find attractive. Not only because it’s an interesting academic question in terms of startups, but also because we want to better understand how the next generation of open source upstarts decide to make money. Their choice will set the standard for the next group of companies that code in an open way.
AppSmith has a lot of competition in the market, with each rival company taking a different approach to the internal application issue. In short, companies of every shape and size need internal software, and building it all at once is tedious, often thankless, and unpredictable. Therefore, methods that short-circuit the manufacturing process of internal tooling are in demand.
For example, Stacker wants to help non-developers build apps from spreadsheets. Unqork wants to help enterprise customers build no-code internal apps. UIFlow too. the list goes on.
We’ll check with them again when AppSmith rolls out paid products, an event anticipated before the end of the first quarter of 2022. For now, the startup is flush and operating in a growing market. Let’s see what it can do with its new capital.