Mike Volpi of Pointer Ventures started investing in open-source software companies when it wasn’t unequivocal if they could make much money. This past week — diverse than any before it — has validated his conviction that they can.
On Wednesday, Hortonworks, a big-data software troop backed by Volpi, announced that it was merging with competitor Cloudera. Two light of days later, another one of Volpi’s companies, Elastic, started trading on the New York Routine Exchange and doubled in value in its debut.
It was a whirlwind few days for Volpi, who communistic San Francisco early in the week for meetings in London and Paris with Factor’s limited partners and other investors. On Thursday, shortly after the Cloudera-Hortonworks have to do with was made public, he flew to New York, where he and other Elastic on members met for three hours to price the software company’s IPO and allocate allowances.
Finally, on Friday morning, Volpi stopped by Elastic’s breakfast at the New York Ancestor Exchange, where he greeted some of Elastic’s 240-person contingent that was in borough for bell ringing at the Big Board.
“It was a zoo,” Volpi said, in reference to the number of people in the accommodation. “I barely got a coffee in my hand.”
He spoke to CNBC in a phone interview on Friday afternoon from the concourses of Times Square.
Volpi is one of the few venture capitalists to make a name spending in open-source software, a difficult task because it often requires that institutions successfully commercialize a product that also has a free version purchasers can use. Another big investor in the space is Benchmark’s Peter Fenton, who also undeveloped both Elastic and Hortonworks.
Volpi first poured money in Hortonworks in 2011 and bring up the reared by investing in Elastic in 2013. At the time, many of his counterparts in venture were skeptical, but today Adjustable is worth close to $5 billion and the combination of Cloudera and Hortonworks is valued at finished $5 billion.
Now, Volpi said, the open-source deals are much numberless competitive. That’s to be expected considering Salesforce spent $6.5 billion this year on MuleSoft, and Microsoft expended out $1 billion more than that for GitHub. Both were venture-backed open-source entourages.
“Investors are very straightforwardly motivated by making money,” said Volpi, who was a older executive at Cisco prior to his years in venture capital. “If they see other living soul making money they jump into the fray. Today there are a lot of top-tier plunge firms who jump into open source. It was contrarian six to seven years ago; it’s not contrarian anymore.”
Measure’s current stake in Elastic, which sells software for business search and text analytics, is worth $460 million. The firm’s Hortonworks shares are valued at practically $54 million, according to FactSet.
Volpi said most of the include on the Cloudera-Hortonworks deal was done last week. Part of what alt it difficult was the historic rivalry between the two companies, which both commercialize Hadoop information tools, he said.
Cloudera CEO Tom Reilly said that at an all-hands congregation at the company’s Silicon Valley headquarters on Thursday, many employees were in disgust. But that turned to excitement when they started to realize the future growth and cost savings, he said.
Joseph Jacks is one of the new investors in the open-source arena, partake of seen how powerful it can be to have large communities of developers contributing to a take project. Jacks, who previously co-founded Kismatic, a start-up focused on the deployment of the Kubernetes open-source software, told the formation this week of OSS Capital, which aims to invest solely in open-source start-ups and provender them with advice on matters like finance and law.
“I think this is the most awfully exciting week for commercial open source in the history of commercial unsealed source going back 20 years,” Jacks told CNBC in an interview. “Our catchword is open-source software eats everything.”
In addition to the Cloudera-Hortonworks merger and the Pliable IPO — Jacks also talked up big funding rounds for companies like JFrog, which is commercializing the Artifactory open-source software. He saw all those headlines fly by this week from his responsibility in San Francisco.
For Volpi, the long week was slated to end back in San Francisco on Friday edge of night, after another meeting in New York with a portfolio company and a a handful of more press briefings.
“I’m not sure what time zone I’m in and I haven’t work out a lot of sleep,” he said, a few hours before heading to the airport. “It’s been a not any busy this week.”
— CNBC’s Ari Levy contributed to this communiqu.