{"id":705,"date":"2016-10-08T00:46:03","date_gmt":"2016-10-08T00:46:03","guid":{"rendered":"http:\/\/www.rsoftsolution.com\/blog\/github-is-raising-a-secondary-round.html"},"modified":"2016-10-08T00:46:03","modified_gmt":"2016-10-08T00:46:03","slug":"github-is-raising-a-secondary-round","status":"publish","type":"post","link":"https:\/\/www.rbsitsoftwaresolution.in\/blog\/github-is-raising-a-secondary-round.html","title":{"rendered":"GitHub is raising a secondary round"},"content":{"rendered":"


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We\u2019re hearing from several sources that a secondary financing round is in the works for GitHub, following its last $250 million financing round that valued it at $2 billion in July last year<\/a>.\u00a0However, there\u2019s a little bit of interesting chatter beyond that they\u2019re raising a secondary for potential liquidation of investors or employees, we hear.<\/p>\n

There are two parts to the story: first, this secondary round may value the company below the $2 billion valuation from its previous round. One source estimated the range could even be\u00a0around\u00a0$1.5 billion, though we couldn\u2019t pin down the exact number. However, another source tells us that this secondary is likely for common stock, which could\u00a0complicate the matter a bit. It\u2019s hard to tell exactly where preferences lie and what rights investors got, so the valuation calculation can get a little fuzzy here \u2014 and it may not, in the end,\u00a0technically<\/em> be a down round in the traditional sense.<\/p>\n

But perhaps the more interesting one is that a rumor is flying around that Microsoft is sniffing around the company. We aren\u2019t sure if it\u2019s related to an acquisition or potentially a strategic investment (talks around one may inevitably lead to the other), or it could be that the companies may be exploring a deeper partnership.\u00a0A representative from GitHub\u00a0said there\u2019s no truth to the Microsoft acquisition rumors, though declined to comment on the rest of the story.\u00a0A representative from Microsoft declined to comment.<\/p>\n

We weren\u2019t able to learn who would be able to participate in this secondary round \u2014 whether it would be investors or employees. But either way, given that GitHub is an eight-year-old company, the liquidation event shouldn\u2019t be super surprising.<\/p>\n

Secondary rounds like this can be important as companies grow into later stages but look to put off IPOs. Given GitHub\u2019s highly distributed workforce and culture, it\u2019s not surprising that earlier employees might be looking for\u00a0some kind of compensation for their extended tenure as new candidates enter into the the organization, which traditionally is known for having a flat structure. It could\u00a0also\u00a0help with retention. Investors, too, looking for liquidity may find themselves sated for a while with a secondary round.<\/p>\n

GitHub is probably one of the most widely-adopted developer tools in the world \u2014 serving as a go-to resource for not only managing code repositories, but also a vital part of the whole open source ecosystem. Keeping those open-source projects healthy and active is a pivotal tool for larger companies, which can use contributors as a farm system for their developer teams and also pick off interesting ideas that pop up from those communities.\u00a0But like any light-touch resource for traditional developers, the company needs to expand into enterprises if it\u2019s going to grow into a fully sustainable business.\u00a0That\u2019s going to be incredibly challenging.<\/p>\n

Speaking of Microsoft \u2014 they also have GitHub-like tools within\u00a0Visual Studio Team Services, so perhaps that\u2019s where the chatter about the company checking in with GitHub is coming from.<\/p>\n

GitHub also faces increasing competition, including from the likes of recently-IPO\u2019d Atlassian. Last year, following its IPO, the company immediately jumped 32% on its first day of trading and valued it at $5.8 billion<\/a>. That was largely on the strength of the company\u00a0actually being profitable<\/em> when it went public. There\u2019s also the recently-emerging GitLab, which is based on open-source Git tools, that raised $20 million just last month<\/a>.<\/p>\n

<\/p>\n

Featured Image: Bloomberg \/ Contributor\/Getty Images<\/small><\/p>\n

Article source: http:\/\/feedproxy.google.com\/~r\/techcrunchIt\/~3\/EUaFuyg9ecQ\/<\/p>","protected":false},"excerpt":{"rendered":"

We\u2019re hearing from several sources that a secondary financing round is in the works for GitHub, following its last $250 million financing round that valued it at $2 billion in <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[19],"tags":[25],"class_list":["post-705","post","type-post","status-publish","format-standard","hentry","category-enterprise-software","tag-enterprise"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t