Gearset Takes $55M for Salesforce Devops Growth
Gearset, a leading Salesforce devops platform vendor based in Cambridge, United Kingdom, yesterday announced its first equity investment of $55 million. Boston-based Silversmith Capital Partners led the growth investment round. “We’ve grown way faster than we could’ve imagined, and today some of the biggest, and most impactful, companies on the planet rely on Gearset. Many enterprises are still early in their digital transformation, and we’ve got a huge opportunity to help them realize the benefits of DevOps as they increasingly rely on low-code solutions,” said Gearset CEO and co-founder Kevin Boyle in a press release.
Gearset Grows Organically
Prior to this investment, Gearset has experienced strong organic growth. Gearset listed some achievements over the past year in the press release:
- Run almost 10 million deployments on behalf of more than 1,700 companies
- Nearly doubled annual recurring revenue while maintaining positive cashflow
- More than doubled headcount
- Placed as the 3rd best tech employer in the United Kingdom, in Best Companies 2021
- Expanded globally with new offices in the United States (Chicago, IL) and Northern Ireland (Belfast)
Green Light for Salesforce Ecosystem Growth
This is Gearset’s first equity investment in its five-year history. But, instead of a seed stage investment, this $55 million more of an early growth stage investment. Based on the investment size and Gearset’s stage, it is comparable to a large Series B equity investment. Investments at this stage improve product development, and expand support, sales, and marketing activities.
Growth investor attention to a software category is interesting because such interest is always justified by strong sales numbers. So, growth investment usually confirms a category is primed for growth. With this announcement, there seems to be a growing consensus that low code tools used by business creators for digital transformation is at the heart of enterprise software growth. And a growing need for devops services like Gearset is a natural consequence of that growth.
“Low code platforms like Salesforce democratize the ability to build business applications and enable digital transformation, a key trend that is still in its earlier innings. This proliferation of users within an organization who can build apps, access data and push code to production requires proper DevOps processes and tools to ensure reliable and compliant releases,” said Sri Rao, a general partner at Silversmith Capital Partners and new Gearset board member.
Kevin Boyle Interview
I had an email exchange with CEO Kevin Boyle about Gearset’s big step towards more growth.
Vern: Gearset seems to be on a rocket ship for adoption in the community, and you’ve avoided investment. Why now?
Kevin: Because we found the right partner that shared the vision for what we wanted to build and how we wanted to go about doing it. We weren’t bootstrapped out of some principled position or anything like that – we simply didn’t need the funding and we didn’t want folks involved that may have made us do unnatural things to grow that weren’t right for our users.
Nobody likes interacting with those vendors where the sales folks don’t know their onions and the product has been bosched together without respect to the users that are going to rely on it day in and day out.
Gearset is at a scale where we can deploy capital to help us do more of the things we want to do more quickly, and Sri and the team at Silversmith fully believe in Gearset’s vision for helping Salesforce teams around the world spend less time managing their releases and instead focus on building value for the users in their org.
Vern: Where will you focus your growth plans now?
Kevin: We’re already public about our roadmap and that will stay true. We’re going to continue to invest in Pipelines and all the associated things that enterprise customers need to be successful with Salesforce. We’ll continue to build products that are rightly known for their excellence in the marketplace and tackle the challenges that are unique to the Salesforce ecosystem.
Just as Salesforce broadens the definition of what the Salesforce platform is, so too will Gearset continue to innovate in the DevOps of those new areas to make sure that our customers have world-class ops across all that is modern Salesforce and low-code SaaS.
Vern: What about global sales and support? Will you be using the investment to beef up North America and expand into more global regions?
Kevin: We’ll continue to invest in our teams in both North American and Europe and support our global user base with a sales team that is proudly different and sells consultatively to help the user achieve their goals, and a marketing team that focuses on great content and education to help customers understand what a difference Salesforce DevOps can make for the users in their org.
Salesforce is a Global Affair
Gearset is in a good place because Salesforce is currently growing like a weed. It is part of the group of businesses ancillary to Salesforce. These companies sort into categories like global consultants, regional system integrators, consulting groups, and independent software vendors (ISVs). The ISVs are broken down again into more categories. Top categories are sales enablement, industry applications, document management, backup & recovery, devops, and cybersecurity.
Gearset is a leading ISV in the devops category. And, since devops is a relatively new category for the Salesforce ecosystem, Gearset has several Salesforce devops platform competitors. I count five major devops platform competitors to Gearset: Copado, AutoRABIT, Flosum, Opsera, and Blue Canvas.
The problem is that over time, there tends to be only two or three winners in any large software category. And Salesforce itself usually becomes one of those remaining competitors. Because of those factors I expect there to be fewer Salesforce devops companies three to five years from now.
So, how does an ISV in the Salesforce ecosystem compete and have a long-term business? One of the hardest, and most expensive, ways to be a successful Salesforce ISV is to match the global footprint of Salesforce. This means establishing sales and support organizations which mirror Salesforce’s global organization. Success also means investing in Salesforce global events, where it is critical to have local staffing. Bottom line, a global sales and support strategy is part of what is needed to be a long-term player in the Salesforce ecosystem today. And accomplishing that growth takes a massive amount of growth capital. Maybe that will be the next growth round for Gearset.
Gearset Gets Needed Fuel for Growth
Up until this Gearset funding announcement, and the recent $26 million AutoRABIT funding announcement, I was concerned about some Salesforce devops companies. It seemed like some companies were satisfied with processing all the work they could handle. But to me, being satisfied with organic growth in the Salesforce ISV ecosystem means that vendor is not thinking about their long-term survival.
Will this $55 million be enough for Gearset to compete enough to survive the inevitable Salesforce devops shakeout? Probably not, because Kevin and team are still refining product. So even after this investment, Gearset has yet to set the stage for sustainable global growth. That’s probably OK for now, but the clock is ticking. Gearset will eventually need to expand into the rest of the world to really match the power of Salesforce.
All this investment activity is good news for Salesforce customers who need to upgrade their application development processes. 2022 and 2023 will be interesting times for Salesforce architects as devops platforms like Gearset extend their reach with more refined products. After all, the Salesforce ecosystem needs devops companies like Gearset to succeed. As the Salesforce platform grows in complexity, consultants, architects, and platform owners will increasingly need tools like Gearset to keep their Salesforce implementations fresh and useful for users and stakeholders.