Appsmith, which provides open source software that helps businesses build in-house applications quickly, announced Series A funding of $ 8 million this morning.
Unlike some newbie tech companies we’ve seen in the internal app market, Appsmith doesn’t take a no-code or low-code approach. Instead, Appsmith targets traditional developers with its service, which provides UI components that can be plugged into commercial data sources. These data-infused interface modules can be combined to create calendars, dashboards and other applications.
Prior to his Series A round of funding, Appsmith had raised $ 2.5 million. Canaan led the fundraising event. Accel and Bessemer participated, among other investors.
When asked why the startup selected this lead investor, co-founder and CEO Abhishek Nayak told TechCrunch that his company has been in contact with Joydeep Bhattacharyya of Canaan since its inception and that the investor has experience with internal Microsoft applications.
Why has Appsmith decided to raise capital now? Per Nayak, the growing use of its service and the desire to grow its platform to support more use cases – things like mobile – were the impetus.
Appsmith does not offer a paid product today. But since it currently offers a hosted version of its open source code, it’s not hard to see where it could enable monetization. Business specific features would be another obvious method of generating income on time.
Why open source?
There has been a tendency for startups that build open source technologies to raise capital over the past few quarters. Appsmith fits perfectly into the group.
But the Why is more interesting. The company told TechCrunch that its co-founders (Nayak and Nikhil nandagopal) want Appsmith technology to be part of their customers’ technology stack, and this open source code is the way to achieve the goal. The logic is simple: open source code is both less at risk for the vicissitudes of startup viability and also easy to dig. Good luck getting similar visibility into proprietary code.
Today, Appsmith’s open source project has over 100 external contributors.
The Appsmith team pointed out to TechCrunch that feedback from the open source community is helpful in making development decisions. And the startup said that by offering a version of its service for free through open source channels, it can provide a service to public benefit companies such as nonprofits, which might not become paying customers. .
By the way, who are the company’s future customers?
Who is Appsmith for?
In the opinion of the startup, its open source software is ideal for small businesses and developers. Its paid products will adapt better to medium and large enterprises once they are deployed.
We’ll see how Appsmith approaches monetization and customer segmentation, two areas of open source business model formation that we find fascinating. Not only because this is an interesting academic question in the case of the startup itself, but also because we want to better understand how the next generation of open source startups decide how to make money. Their choices will set the standard for the next cohort of building code companies in an open fashion.
Appsmith has a lot of competition in the market, with each rival company taking a different approach to the problem of internal applications. In short, businesses of all shapes and sizes need in-house software, and building it is tedious, often unrewarding, and uninspiring. Thus, methods that can bypass the process of building internal tooling are in demand.
Stacker, for example, wants to help non-developers build apps from spreadsheets. Unqork wants to help corporate clients build in-house applications without code. UiFlow too. The list goes on.
We’ll get back to Appsmith when it activates paid products, an event expected to happen before the end of Q1 2022. For now, the startup is booming and working in a growing market. Let’s see what he can do with his new capital.