Chef Orders Up $40M Series E for DevOps Automation Software

As software eats the world, every company must become a software company. You’ve heard that before. But it’s easier said than done.

Seattle-based Chef, the IT automation software maker that has just raised a $40 million Series E financing, is growing in large part because of its ability to help companies—including traditional large enterprises—transform themselves into high-speed developers of Web apps and services that are central to their business.

“Software is becoming the pointy end of the spear for every company and every industry today,” says Chef CEO Barry Crist. “The competitive edge is can they operate at velocity?”

The company, founded in 2008, raised its latest funding from DFJ Growth, which led the round. Chef’s prior investors Battery Ventures, Citi Ventures, DFJ, Ignition Partners, and Scale Venture Partners also participated, as did Hewlett Packard Ventures. Chef has now raised $102 million in venture capital.

Crist says Chef decided to raise more private capital after asking itself, “What is the most efficient to raise significant capital at good terms that is the least distracting to our business?”

But an IPO could be in the future. “We’re a company that is thinking about public markets. We’re interested in them. But there’s no real pressure for us to have to enter those today,” he says.

The funding will back geographic expansion, particularly in Asia, Europe, the Middle East, and Africa, and North America. The company will also focus on product development, particularly around containerization and compliance.

Chef’s software helps companies automate IT tasks at speed and scale. Instructions and policies for a given app or server configuration, for example, are uploaded to a central server, which can reside in the cloud, on premises, or in a data center. Client software on other servers regularly check with the central server for any changes and automatically configures to match the central server’s “recipe.”

This kind of automation becomes more important as companies accelerate the pace at which they release new software.

“For the enterprise particularly, this has been an enormous shift over the last three years,” Crist says. “Many big enterprise companies going back not so long would release [software] only several times a year. Now they’re shifting to a world where they’re releasing software every day and sometimes every hour.”

Crist

Crist

Chef says more than half of companies in the Fortune 50 use its software, and 80 percent of its revenue comes from mainstream enterprises.

Chef sits squarely in the new world of IT known as DevOps, a combination of development and operations. DevOps represents a cultural shift as much as a technological one and requires even skilled IT people and software developers to make changes in how they work.

Crist says there’s usually a handful of its customers cramped in its office—a month ago, it was a team from Standard Bank, the largest in Africa—getting help with projects they’re leading that might represent dramatic changes within their organizations. When Chef raised $32 million in 2013, Crist talked about the need to educate IT practitioners on what DevOps entails.

“That’s what we’re helping with them with,” Crist says. “It’s as much about the people and the skills as it is the platform. So when people come hang out here, almost always it’s part of a digital transformation project that they’re driving.”

The Standard Bank team, for example, wanted to increase the speed at which they developed new software, but also wanted to do more on their own. There’s a great deal of IT outsourcing done by African companies, Crist says. Standard Bank is trying to build more IT skills internally. “Part of DevOps is around self-reliance,” he says.

Benjamin Romano is editor of Xconomy Seattle. Email him at bromano [at] xconomy.com. Follow @bromano

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