Cloud automation startup HashiCorp reeled in more revenue at the end of 2020 than in any other previous quarter as the pandemic caused an "enormous" surge in demand.
HashiCorp builds services that allow customers to easily manage and automate their cloud services. For example, the online gaming company Roblox — which went public earlier this month and saw its stock spike 16% in its market debut — uses HashiCorp to keep its games up and running at all times.
Its success is largely due to the rise in cloud demand during the pandemic and giving customers what they asked for, HashiCorp CEO Dave McJannet told Insider.
Although HashiCorp raised a $175 million funding round at a $5.27 billion valuation about a year ago, McJannet says the company currently supports itself mainly through its revenue. McJannet said HashiCorp is growing fast but declined to comment on an exit for the company.
"Too much hype gets made around the idea of financing events in general in tech markets," McJannet said. "We've been unwavering in our view that we have the opportunity to build a very significant infrastructure company. Serving the needs of Global 2000 and most important companies on the planet – that's really where we spend our time."
Here's why HashiCorp had its best quarter ever and how it's investing in its future:
The pandemic caused an 'enormous' surge of demand
HashiCorp's customers were very cautious at the start of the pandemic, McJannet said, becoming hesitant about making decisions about their contracts and what products to commit to.
But once the initial hesitation phase passed and companies realized that to adapt to remote work and online business they needed a slew of cloud services more than ever.
"Because our products underpin those applications, we saw enormous downloads of our product," McJannet said.
Today, HashiCorp (which was a remote-only company even before the pandemic) has about 1300 employees. It hired about 400 new employees during the pandemic — particularly in engineering, customer success, and field sales — and plans to bring on another 500 workers this year
Besides hiring, HashiCorp invested heavily in building out its products: It's had at least one new release per month over the last year.
It also started offering managed services for customers, something customers have been asking for for the past three years. Managed services allow customers to run HashiCorp products on the cloud without having to do much of the self-management themselves. HashiCorp plans to increasingly offer its products as hosted services.
"The core team has been cranking," McJannet said. "We have a pretty big army of developers that are hard at work."
HashiCorp even launched two completely new products last October: a security product called Boundary and a tool for releasing code called Waypoint. Right now, these products are available as open source, which has generally been a major key to HashiCorp's success, MacJannet said.
"Every infrastructure company born today will be open source," McJannet said, citing how potential customers are now wary of legacy proprietary software companies like Oracle because they'd prefer something more flexible without lock-in. Open source software gives companies an alternative they can customize.
"The 'Oracle experience' opened the ways of Global 2000 to be comfortable for looking at infrastructure as a way to have a bit more flexibility," McJannet said. "Because if it's open source, there's more of an out."
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