Telstra Ventures led funding round for leading Kubernetes vendor, bringing total funding to $95 million

Rancher Labs , the creator of the most widely used Kubernetes management platform, closed a $40 million Series D funding round. The round was led by Telstra Ventures. One of its investors, Telstra Corporation, is a Rancher Labs customer and is Australia’s largest telecommunications company. The funding round also included participation from existing investors Mayfield, Nexus Venture Partners, GRC SinoGreen, and F&G Ventures, bringing total funding to date to $95 million.

The company will use its Series D funding to expand focus on product innovation, increase investment in go-to-market activities, and to accelerate market expansion.

Sheng Liang, CEO at Rancher Labs said: “In 2019, we experienced 169% year-on-year revenue growth, and this round of funding is the ultimate validation of the market and our unique technologies. Just as Linux became the standard computing platform for the data center, cloud and devices in the 2000s, we fundamentally believe Kubernetes is fast becoming the ubiquitous enterprise computing platform for multi-cloud, heterogenous IT environments in the 2020s.”

Innovation and Expansion

Rancher Labs’ significant year on year growth in revenue and rapid expansion of its commercial customer base growth reflect robust demand for Kubernetes within the enterprise. According to 451 Research, 76% of enterprises worldwide are set to standardize on Kubernetes by 2022, making this the most relevant platform to leverage business strategy and cloud native applications. Rancher Labs will use the funds to continue executing against their Run Kubernetes EverywhereTM strategy, specifically in three areas:

• Accelerate Innovation – Leveraging Kubernetes as the common computing standard, the company will continue to innovate in key areas including heterogenous cluster federation, fleet management, and Kubernetes at the edge.
• Go-To-Market Expansion – The company will expand sales coverage, marketing, finance, operations, customer success, and customer support. Additionally, the company has plans to expand geographic coverage within and beyond the fourteen countries where they currently operate.
• Market Expansion – Leveraging their leadership in Kubernetes at the edge, the company will work with leading technology companies to develop innovative solutions in markets including 5G, digital factories, connected cars, video surveillance, and medical research.

“Operators will find an open-source K8s management platform for multi-CaaS, multi-infrastructure environments a valuable solution for managing applications/CNFs built in different PaaS/CaaS,” stated Michela Venturelli, Research Analyst at Analysys Mason.

Growing Customers Becoming Investors

Telstra Ventures first became interested in Rancher Labs based on Telstra Corporation’s successes using Rancher to support its core contact center, customer network, and services provisioning. “Outside of Google, Rancher was one of the very early companies to recognize the profound impacts that Kubernetes would have on the global IT market. During our early investment discussion, I recall Sheng saying that ‘Kubernetes could become the TCP/IP of computing’. That was a very profound statement with a massively attractive vision,” said Steve Schmidt, an investment partner who leads Telstra Venture’s enterprise investments.

“Leading telcos like Telstra are rolling out 5G deployments, and we believe Rancher is uniquely positioned to bring Kubernetes to 5G.” “As an investor, you’re always on the look-out for world class entrepreneurs with the talent to build and scale great products in big markets. Our mission is ‘partnering with the extraordinary’ and after spending time with Sheng, it was clear Rancher is building something special.”