It wasn’t long ago that Docker looked like it was on the ropes. In 2019, it sold its corporate business and decided to focus solely on a developer audience with a range of commercial and open source tools. It was a pretty big bet for a six-year-old company to sell the part of itself that was most lucrative at the time and completely shift its focus.
A few months ago, the company announced that its annual recurring revenue (ARR) had quadrupled to over $50 million just two years after the decision to restructure. Today, the company announced a $105 million Series C investment at a valuation of $2.1 billion.
CEO Scott Johnston, who has been with the company in various roles for years, clearly relied on the developer community, which has paid off for him as he has been able to design a successful business model since the restructuring.
“Two and a half years ago when we had this product that developers loved; Even though we had popular upstream open source assets and a well-known brand, it wasn’t clear that we could take all of that and rework the product strategy that we needed to enter the market, successfully rework the company’s business model – all of that was it’s an open question,” Johnston said.
“We are happy to be here two and a half years later. We haven’t always made perfect decisions or perfect bets, but most of our bets have paid off and serve the developers with the products we ship,” he said.
Additionally, Johnston reports that at a time when investment appears to be slowing, with investors coming to him, he had a wealth of opportunities and could have gotten more if he wanted to. “It was unsolicited and we had a choice. We had several term sheets, all of which were competitive. And we could have collected more than 105 that we collected. And that is why we are very fortunate to be able to vote.”
He believes that the potential market for developer tools is not only a well-known size with an open-source component popular with developers, but also huge, especially as demand for applications continues to grow. He said the combination of those two factors has piqued investor interest in this round.
During the restructuring in 2019, the company shrank to 70 employees. Today there are over 150 employees, with the expectation that this number will double in the next year. As the company adds new employees, Johnston said there are hard metrics in terms of building a diverse workforce.
“So we have an internal KPI, Key Performance Indicator, which is quantified in relation to diversity. And we have it at the corporate level, but then all the managers, the leaders for their functions, are there too. And again, just to make it clear again, that’s a number that we also had to share with the board,” he said.
He said they watch it weekly. “We have a weekly summary of our progress in our hiring and recruitment funnel, and there is an explicit diversity metric in that weekly recruitment. And so it goes back to why, right? And that’s because diverse teams are better teams. It’s not only better from a human perspective, but frankly, it’s also better from a capitalist performance perspective. We firmly believe in it, and in order to implement that belief, we take responsibility in numbers,” he said.
Today’s investment was led by new investor Bain Capital Ventures, with participation from Atlassian Ventures, Citi Ventures, Vertex Ventures and Four Rivers, and existing investors Benchmark Capital, Insight Partners and Tribe Capital. The company, as it stands, has raised $163 million at that $2.1 billion valuation. Bain’s Enrique Salem will join Docker’s board of directors under the terms of the agreement.