Knowing how a cloud application will perform in production typically requires extensive development and testing in the environment in which it is deployed, such as AWS, Azure, or Google Cloud. However, this can be a resource-intensive task, especially with issues related to latency (the time it takes to constantly send data) and its associated costs.
Swiss startup LocalStack sought to address this problem by moving the development process from the cloud to the developer's local machine (i.e., laptop), emulating a real-world environment. For now, the company is focused on AWS cloud apps, but the company aims to further strengthen and move to multi-cloud.
To support that strategy, the company announced Tuesday that it has raised $25 million in a Series A round led by Notable Capital, one of two entities spun off from GGV Capital earlier this year.
By way of background, LocalStack started as an open source project in 2017 when founder and co-CEO Waldemar Hummer (pictured above, right, with co-founder Gerta Sheganaku and Notable Capital managing partner Glenn Solomon) was at Atlassian. I did. Initially, they were trying to: Help one of your Atlassian colleagues get some work done while traveling to the office.
“We have a team member who commutes by train, so we wanted to help her be more productive while offline on the train,” Hammer told TechCrunch.
The idea germinated as a side project during that time, and in 2013 Hammer teamed up with Gerta Šeganak, whom he had known since their days at the Vienna University of Technology, to promote early community adoption of the open source project. . The company launched as a full-time business in 2021 and, after raising a small seed round, was later joined by a third co-founder, Thomas Rausch, who now serves as the company's head of engineering.
“What initially got me excited about LocalStack was the increased community adoption, especially after LocalStack was publicly endorsed by Jeff Barr (AWS Chief Evangelist). The project's GitHub star became overnight. has increased dramatically and has continued to increase ever since. “Through our interactions with the community, we learned that some of our users work at some of the world's largest companies and are looking to deploy LocalStack not only on their local machines but also on their CI. [continuous integration] pipeline. ”
Today, the company counts about 900 paying users, including many self-service customers including Apple, Comcast, IBM, Workday, and more. LocalStack also works directly with some customers through a formal procurement and onboarding process.
local stack. Image credit: LocalStack
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LocalStack's products consist of two core components. One is an emulator, which is basically a Docker image that you download to your local machine along with all the AWS APIs you need. The second part is the cloud platform, which provides access to additional features such as team collaboration, telemetry data, and insights.
The company also retains some of its open source roots with a community version, making about a third of its AWS services available through public repositories on GitHub. An additional two-thirds is kept behind a private repository for paying customers. This community version can serve as a useful tool for onboarding paying customers in the future, but this is not always the case.
“Community users often sign up for LocalStack but don't become paying customers,” says Sheganak. “We have thousands of community users who have signed up for our web app but have not purchased a paid service.”
It's worth noting that developers can already “mock out” certain parts of the infrastructure locally and run tests. There are also popular frameworks like Testcontainers that can be used to simulate specific cloud services or infrastructure components on your local machine, but they typically look, feel, and “experience” differently than a real cloud environment. Masu.
AWS itself also offers several tools that allow developers to emulate some of its services locally, including AWS SAM, which supports AWS Lambda, DynamoDB, and more. But LocalStack's selling point is that it supports over 100 core AWS services, including identity and access management (IAM) through Amazon Cognito, Amazon Kinesis data streams, and Amazon's interactive query service Athena.
“LocalStack is kind of a drop-in replacement for the AWS cloud,” Hammer says. “AWS SAM is actually specialized for a specific set of services. LocalStack is more comprehensive.”
LocalStack Team. Image credit: LocalStack
LocalStack previously raised $3 million in undisclosed seed funding from CRV and Heavybit. Hammer, which has operated largely under the radar, said it was already generating “substantial revenue” and had a global team of more than 50 people primarily based in Europe. However, the company's customer base is essentially in the US, and the company is currently looking to strengthen its product and go-to-market strategies. A new Series A round will help fund that effort.
For now, LocalStack's core is AWS, but the company is also working on adding support for Snowflake. Although Snowflake is a different domain than AWS, it has similar challenges related to cloud software development. Support for Snowflake remains in early “preview” for now, but with $25 million in new money in the bank, LocalStack is also preparing to go multi-cloud, and Microsoft is expanding support for Azure, and Hammer said he expects it to be available sometime in 2025.
“We've had a lot of requests for Azure,” Hammer said.
In addition to lead sponsor Notable Capital, LocalStack's Series A round also included participation from existing investors CRV and Heavybit.