Vercel Raises $150M Series D to Expand Front-End Platform
Vercel Secures $150 Million in Series D Funding
Just months after announcing a $102 million Series C funding round, bringing its valuation to $1.1 billion, Vercel, the company powering the Next.js framework, has revealed a new $150 million Series D investment. This latest round elevates the company’s valuation to $2.5 billion.
With this funding, Vercel’s total raised capital now reaches $313 million. GGV Capital spearheaded the round, with contributions from existing investors including Accel, Bedrock Capital, CRV, Geodesic Capital, Greenoaks Capital, GV, 8VC, Flex Capital, Latacora, Salesforce Ventures, and Tiger Global. Additionally, SV Angel joined as a new investor.
Positioned at the Forefront of Industry Trends
Vercel is strategically positioned within several key industry movements, most notably the Jamstack architecture. This approach emphasizes rapid, static websites, while still incorporating dynamic features for personalized user experiences. Recently, Netlify, a fellow Jamstack provider, secured $105 million in funding, suggesting a growing trend within this sector.
Growth and Platform Expansion
Vercel generates revenue by offering a hosted, serverless platform for front-end applications, built upon its open-source initiatives. The company has experienced substantial growth recently. Next.js now boasts over 2 million weekly npm installs, and traffic across its edge network has increased by 700% since April 2020.
Currently, the network processes more than 24 billion requests.
Investor Perspective
GGV managing partner Glenn Solomon explained their increased investment. “The company had ambitious goals for this year and was exceeding them significantly from a financial perspective.” He continued, “We observed the expansion of the Next.js community and the synergy between the Vercel business model and this community.”
Solomon highlighted the importance of product-led growth, comparing Vercel’s trajectory to successful companies like Square, Slack, and HashiCorp. He believes Vercel is experiencing a similar growth dynamic.
Future Ambitions and Strategic Investments
According to Vercel co-founder and CEO Guillermo Rauch, the decision to raise additional funding was driven by the company’s long-term vision. “Our aim is for Vercel to become a comprehensive platform encompassing the entire software development lifecycle on the web,” Rauch stated.
“This includes everything from initial concept to production deployment, performance analytics, and the generation of new ideas. Achieving this requires substantial investment.” He emphasized the alignment with GGV Capital’s values, particularly their “go long” philosophy and support for open-source models.
Plans for the New Funding
Vercel intends to utilize the new capital to expand its teams, with a particular focus on strengthening its go-to-market strategies. The company is also exploring potential strategic acquisitions to enhance its end-to-end platform.
In 2020, Vercel began developing more robust analytics features, adding a new dimension to its offerings beyond the framework and hosting services.
Improving the Developer Workflow
The team is dedicated to refining the development experience for users on its platform. The recent launch of Checks represents an initial step in this direction, but Rauch indicated that further improvements are planned.
“We consistently receive feedback that the Vercel workflow, in addition to the framework and hosting, is a key differentiator for developers,” Rauch concluded. “This is a logical area for continued investment.”
