About Two Sigma Ventures
Two Sigma Ventures is an early-stage venture capital fund that invests in companies run by highly driven people.
- New York, New York, United States
- 11-50
- Venture Capital
- Early Stage Venture, Seed
- twosigmaventures.com
About Gitlab
GitLab is a web-based Git repository manager that offers a variety of features for software development teams.
- San Francisco, California, United States
- 1001-5000
- Series E
- Public
- about.gitlab.com
Our Investment in Gitlab
As an investor, I often think about what we can learn from the successful software companies of the past.
The reality is that there are many complex factors that come together to create that special formula of success and overtime that formula changes, making building and investing in great software companies a dynamic challenge.
In almost all cases, great software companies start with a disruptive product that is significantly superior to legacy applications.
But, there are lots of great product companies that never quite become successful businesses.
Total Addressable Market (TAM), quality of team, timing, execution, luck, etc. all play a role in the making of a great company.
Disruptive by Nature
Another key characteristic of a great company is a disruptive business model. It seems great software companies are often built on the foundation of a great product combined with a disruptive business model.
The disruptive business model in software over the past 15+ years has been the migration of applications to the cloud. Siebel → Salesforce, Documentum → Box, Peoplesoft → Workday, Tibco → Mulesoft, Hyperion → Anaplan, BMC (Remedy) → ServiceNow, etc. are all examples of the power of combining great products with a disruptive business model.
The cloud completely changed the risk, adoption, utility, and economics of deploying enterprise software.
A Model of Innovation
I am always looking for startups that are pushing the boundaries of what we thought possible and are innovating on multiple dimensions.
This is why I am excited to announce our investment in GitLab. GitLab is an open core developer collaboration platform that provides a complete workflow to create, review, and deploy code simply and effectively.
GitLab started as an open source project in 2011, was subsequently incorporated in 2014, and was part of Y Combinator’s 2015 winter batch.
The company is capitalizing on a few mega trends in software development: software is becoming a core capability for all enterprises, adoption of Git for source code management, adoption of Scrum and Agile development methodologies, and the need for integrated software development tools.
I had the privilege to work at two of the most successful SaaS vendors (Salesforce and Box), which strongly influenced my views on the right way to build a software company.
I will probably always think SaaS-first, but I also know that great founders will continue to innovate and iterate on new business models that drive adoption and monetization of their products.
I would like to highlight why I believe GitLab has the potential to build a great company.
Market Potential and Growth Trajectory
GitLab is in the middle of an enormous market of software solutions helping developers collaborate and create software.
Over 20 million developers globally can benefit from using GitLab’s platform to translate their ideas into products. Git, the widely popular open source version control system, is still merely 30% penetrated into the enterprise market.
The market is still dominated by traditional waterfall-based solutions, creating a big opportunity for GitLab to continue to penetrate the enterprise.
Conclusion
As the software development landscape continues to evolve, we are excited to be part of GitLab’s journey in shaping the future of how enterprises build software, driving both innovation and efficiency in the process.
You can read the rest of “Why we invested in” collection here:
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