JBoss, the company behind the eponymous open-source application server, has sealed a $10m investment, signalling a return of venture capital money to open-source companies and the possibility of an IPO.
The company's first round of venture financing was led by Matrix Partners, with the participation of Accel Partners. The new funds will be used to strengthen the company's profitable balance sheet and support product development and marketing, as JBoss ramps up to meet growing enterprise demand for the JBoss application server and support services.
In concord with the investment, JBoss has changed its structure to that of a corporation, which can go public, unlike the limited liability status that it previously held. Accordingly, JBoss Group is now known as JBoss Inc.
In an interview with ZDNet UK, Marc Fleury, founder and president of JBoss, did not rule out the possibility of an IPO, but said the options remain open. "Right now every venture capitalist invests with an exit strategy in mind," he said. "Everybody in the group hopes for an exit strategy, whether it is an IPO or just for the business to continue growing profitably. But we have a great company that is fast growing, and everybody focused on execution. Whatever will be will be."
Fleury said the involvement of venture capitalists was as much about getting professional help growing the company as it was about the cash. "JBoss has been profitable since the beginning and we have had the money to grow, although the investment will allow me to reinvest all the profit, whereas before I was trying to keep some money aside. That will help."
But, said Fleury, what the company really needed was a base that would enable enterprise customers "to feel safe about this open-source thing. The investment is a way to make sure I get all the help I need in building the company."
The venture capitalists helped JBoss focus on hiring a management team, he said. "They have been working with us for some time, and I can now see what VCs bring to start-ups. They help us focus and execute on our business plan. They can build companies with their eyes closed. I cannot do that."
As part of the deal, Matrix general partner David Skok, previously the founder and chief executive of SilverStream Software, joins the JBoss board of directors.
Fleury also said that getting the investment this time around was a very different experience from his first attempt. "When I had a first trial [at getting VC money] three years ago nobody would talk to us," said Fleury. "This time we stirred up quite a frenzy and got two of the top VCs in a relatively short time." The terms sheet was signed in just two months, he said. "Definitely this signals a big shift in attitude towards investing in open source."