Moderne Raises $30M to Tackle Technical Debt

Understanding and Addressing Technical Debt

Technical debt arises when companies prioritize rapid development and temporary solutions over code quality and long-term maintainability. This often results in a software stack that becomes increasingly complex and expensive to maintain as it expands. Adding new features to such a system also becomes significantly more challenging.

Left unchecked, the issues associated with technical debt can escalate rapidly, mirroring the compounding effect of financial debt.

Moderne's Solution for Codebase Modernization

Moderne is a company focused on resolving this challenge. They perform comprehensive analyses of a company’s entire software stack. This includes managing updates to frameworks and libraries, identifying and rectifying security vulnerabilities, and migrating legacy technologies to contemporary, cloud-native alternatives.

The company’s approach centers around automated code refactoring, ensuring efficient and scalable improvements.

The Foundation: OpenRewrite

Moderne’s technology is built upon OpenRewrite, an automated code refactoring ecosystem. This platform empowers developers to implement large-scale changes across extensive codebases.

The founders of Moderne, Jonathan Schneider and Olga Kundzich, previously held senior positions in engineering and product management at Pivotal, a company acquired by VMware in 2019 for $2.7 billion.

Origins of OpenRewrite and its Adoption

Schneider initially developed Rewrite, an internal tool at Netflix, to automate the refactoring of Java code. This project was later released as open-source OpenRewrite, quickly gaining traction among prominent organizations.

Major tech companies have integrated OpenRewrite into their tools. For example, Microsoft’s GitHub Copilot upgrade assistant utilizes OpenRewrite for updating Java applications, and Amazon’s AWS incorporated it into its Q Code Transformation tool in 2023.

Moderne's Enhancements to OpenRewrite

While OpenRewrite provides a robust foundation for automated code refactoring, Moderne enhances its capabilities for enterprise-level deployment.

These enhancements include:

Support for multiple repositories.
More sophisticated workflow management.
Collaborative features through a web-based interface.
Comprehensive reporting and analytics.

Funding and Growth

Founded in Miami, Florida, in 2020, Moderne has already secured approximately $20 million in funding.

The company recently closed a $30 million Series B funding round led by Acrew Capital, with participation from Allstate, Amex Ventures, Intel Capital, Mango Capital, Morgan Stanley, TIAA Ventures, and True Ventures.

moderne raises $30m to solve technical debt across complex codebases

Future Focus: Application Security

Currently, Moderne employs around 50 individuals, primarily experienced professionals across various functional areas. This allows the company to maintain a lean organizational structure.

The new funding will be used to expand Moderne’s capabilities, particularly in the domain of application security (AppSec). The company recently appointed its first Chief Information Security Officer, with a formal announcement expected shortly.

The selection of Acrew Capital as the lead investor was strategic, given founding partner Mark Kraynak’s extensive investment history in cybersecurity companies.

“We intentionally chose Acrew and Mark to bolster our expertise in AppSec auto-remediation,” Schneider explained to TechCrunch.

The Evolving Focus of Moderne: From Code Modernization to Tech Stack Liquidity

Significant shifts have occurred since Moderne secured its initial seed funding in 2021. Initially centered on “code modernization,” the company’s focus has broadened to encompass what Schneider defines as “tech stack liquidity.”

This concept encompasses any alterations a business seeks to implement throughout its entire codebase. Examples include migrating to a different cloud platform, changing providers for feature flags, or proactively preventing dependence on a single database vendor.

Traditional Approaches and Moderne’s Competitive Advantage

Historically, such undertakings were typically handled by consulting firms. These firms would engage in a detailed, repository-by-repository analysis of a company’s code. Schneider identifies this “manual work” as Moderne’s primary competition.

He asserts that this represents a substantial, multi-billion-dollar challenge across various industries, one that Moderne is uniquely positioned to resolve.

Leveraging Large Language Models (LLMs) for Scalable Code Transformation

Like many tech companies today, Moderne is capitalizing on the advancements in large language models (LLMs). The company introduced “AI-assisted auto-refactoring” last year.

This feature aims to deliver the necessary “accuracy and efficiency” for large-scale code transformations across numerous repositories. This differs from LLM-powered coding assistants, such as GitHub’s Copilot, which generally focus on smaller, context-specific code segments.

The Role of OpenRewrite’s Lossless Semantic Tree (LST)

Schneider explains that Moderne’s existing infrastructure, specifically OpenRewrite’s Lossless Semantic Tree (LST), prepared them well for integrating LLMs. The LST provides a structured representation of source code.

This allows for a deeper understanding of the code’s meaning while preserving crucial details like whitespace, comments, and syntax. Originally developed for OpenRewrite’s Recipes feature, the LST ultimately became the “ideal data source” for Moderne’s current AI initiatives.

LST as a Vital Data Source for AI Models

“These [LLM] models require substantial amounts of data, and LST has proven to be an exceptionally valuable resource for code,” Schneider stated. “The LST captures intricate structural and semantic context from thousands of repositories.”

This unique capability empowers Moderne to provide AI models with essential context, facilitating agentic experiences that can drive modernization, enhance security, and perform code analysis on a large scale.

Signifying a Shift: The Domain Name Change

Notably, Moderne also changed its primary web domain from .io to .ai last year. This change underscores the company’s strategic focus on artificial intelligence.

“The transition to the ‘.ai’ domain… reflects a strategic evolution,” Schneider confirmed.

The Continuous Cycle of Modernization

An examination of Moderne’s clientele reveals which organizations stand to gain the most from its technological solutions – including major corporations like Walmart and the insurance leader, Allstate.

The company’s investment portfolio features prominent players in the enterprise sector, such as American Express and Morgan Stanley, suggesting a strategic alignment with these investors.

However, Moderne’s technology isn’t solely for massive organizations grappling with extensive, complex codebases.

Schneider points out that the smallest team currently utilizing Moderne’s services consists of only six developers.

Ongoing Evolution of Tech Stacks

Furthermore, achieving a modernized system isn’t a one-time accomplishment.

The ideal technological infrastructure is perpetually changing; newer components supersede older ones, and industry best practices are in constant flux.

In essence, technical debt will invariably remain a challenge for companies striving for an ideal architectural design.

Schneider explained, “When you ask a technology leader if they ever truly arrive at that ‘north star’ architecture, the answer is almost always no, as the goalposts continually shift.”

Codebases are perpetually evolving, necessitating updates, security enhancements, consolidation efforts, and general improvements.

Modernization is therefore a continuous process.

Paradoxically, the most cutting-edge tech stacks are often the most vulnerable to disruptions caused by the swift development of third-party and open-source dependencies.