Developers often write, build, and test code in their local environment (i.e., on their laptop) before sending it to a cloud service for integration and deployment. There's nothing wrong with this approach. But local development can introduce challenges, such as conflicts between development environments or, worse, security vulnerabilities.
The usability issue of local development environments is one of the reasons why cloud development environments (CDEs), which offer a range of remotely hosted software development tools, have become increasingly influential in recent years. Gartner predicts that by 2026, 60% of cloud workloads will be built and deployed using CDEs.
One of the earlier entrants into the CDE market is Coder, which offers pre-configured enterprise cloud environments for developer use cases. Ahead of a major expansion of its platform, Coder announced it has closed a $35 million funding round, an extension to its Series B, led by Georgian with participation from Uncork Capital, Notable Capital and Redpoint Ventures.
Coder co-founders Ammar Bandukwala, Kyle Carberry, and John Andrew Entwistle met online in high school over a shared interest in building Minecraft plugins and servers. To make it easier to mod the video game, the friends created an open-source tool using Microsoft's Visual Studio Code IDE to develop software remotely via a browser.
Bandukwala, Carberry and Entwistle launched Coder shortly thereafter (in 2017), and the tool became the startup's first product.
“The general tech slowdown has been an accelerating factor for Corda,” said Corda CEO Rob Whiteley, who joined the company following Entwistle's departure in 2021. (Bandukuwala and Carberry remain co-CTOs.) “The mantra of 'doing more with less' has forced companies to look inward, exploring how to retain their best talent and operate more efficiently without sacrificing speed and security.”
Image credit: Coder
Coder provides free, open source software for platform and development teams to migrate their development environments and source code from local machines to cloud infrastructure. The software is self-hosted and self-managed, works across multiple clouds, and offers features such as role-based access control and end-to-end encryption.
Coder makes money by charging a fee for Coder Enterprise, a self-hosted version of the open-source software that adds governance and user management features.
“Platform teams have full control over where Coder is hosted and what services it uses,” Whiteley said. “Centralizing a previously distributed development environment gives companies better control and management of their source code and IP.”
The sales pitch appears to be resonating.
Coder's open-source software has about 1.2 million monthly active users, and its paying customers include Dropbox, Discord, and Skydio (as well as four unnamed US intelligence agencies). Meanwhile, revenue doubled last year, and Whiteley expects it to double again in 2024 as Coder expands its customer base across Europe, the Middle East, and Africa.
“By 2025, 30% of large enterprises will use cloud development environments to streamline development workflows and improve control, and by 2027, 40% of organizations in highly regulated industries will mandate cloud development environments,” Whiteley added, citing Gartner data.
Whiteley said the Austin, Texas-based company, which has about $80 million in the bank and just over 50 employees, plans to grow globally, invest in open source tools with a dedicated developer relations team and expand its sales, marketing, support and engineering organizations.