451 CAOS Theory *
A blog for the enterprise open source community

Open source funding plunged in Q4, FY07

Matthew Aslett, January 2, 2008 @ 11:32 am ET

NB The figures originally reported here were preliminary and have been revised for a formal CAOS report to be published in the first half of 2009. The figures for Q4 have been removed or updated, while those for the full year have been updated:

“I believe last year was actually the peak year of open source fundraising… This year is down slightly, but not down in such a dramatic way to indicate anything else but a good appetite for funding of open source,” Matrix Partners general manager David Skok told LinuxInsider in late 2007.

The raw data indicates open source funding fell more than slightly in 2007. Disclosed funding deals as funding for open source software declined 34.0% to $403.9m.

In response to the LinuxInsider article noted above, Matt Asay argued that it would be wrong to conclude that VC funding for open source is drying up. Once again we return to Larry Augustin’s prediction that the value and number of deals would decrease this year and would be unlikely to increase until we see more evidence of successful exits.

On the subject of exit strategies, we previously noted that the big money for established open source vendors went on M&A activity rather than venture funding in the third quarter. While there were fewer M&A deals in the fourth quarter, and none of the big money deals (Citrix/XenSource, Yahoo/Zimbra) we saw in Q3, there has been a noticeable shift towards open source M&A activity as open source funding has fallen.

Meanwhile Gianugo Rabellino, CEO of Sourcesense previously questioned whether the VC industry might have “filled the checkerboard and… moved to something else”. While it is certainly true that many of the investment opportunities in the obvious application categories have been filled, there are still emerging opportunities in new markets.

Examples from the fourth quarter include Acquia raising $7m in Series A funding to support the commercialization of Drupal, while open source-based home appliance vendor Axentra raised $6m in October. Meanwhile, as Asay states “as for investments into the ‘easy’ enterprise categories, there’s still money there, too”. We are aware of one significant funding round for an established open source vendor that is set to be announced soon, and there are rumors of others to follow in the first quarter.

Clearly, open source funding hit a peak in 2006, and while funding levels are unlikely to increase substantially in 2008 there is no reason to believe that the rate of decline seen in 2007 will be repeated this year.

Incidentally, for those that like to follow the running total, open source funding to date now stands at $2.38bn.

viagra
free viagra
buy viagra online
generic viagra
how does viagra work
cheap viagra
buy viagra
buy viagra online inurl
viagra 6 free samples
viagra online
viagra for women
viagra side effects
female viagra
natural viagra
online viagra
cheapest viagra prices
herbal viagra
alternative to viagra
buy generic viagra
purchase viagra online
free viagra without prescription
viagra attorneys
free viagra samples before buying
buy generic viagra cheap
viagra uk
generic viagra online
try viagra for free
generic viagra from india
fda approves viagra
free viagra sample
what is better viagra or levitra
discount generic viagra online
viagra cialis levitra
viagra dosage
viagra cheap
viagra on line
best price for viagra
free sample pack of viagra
viagra generic
viagra without prescription
discount viagra
gay viagra
mail order viagra
viagra inurl
generic viagra online paypal
generic viagra overnight
generic viagra online pharmacy
generic viagra uk
buy cheap viagra online uk
suppliers of viagra
how long does viagra last
viagra sex
generic viagra soft tabs
generic viagra 100mg
buy viagra onli
generic viagra online without prescription
viagra energy drink
cheapest uk supplier viagra
viagra cialis
generic viagra safe
viagra professional
viagra sales
viagra free trial pack
viagra lawyers
over the counter viagra
best price for generic viagra
viagra jokes
buying viagra
viagra samples
viagra sample
cialis
generic cialis
cheapest cialis
buy cialis online
buying generic cialis
cialis for order
what are the side effects of cialis
buy generic cialis
what is the generic name for cialis
cheap cialis
cialis online
buy cialis
cialis side effects
how long does cialis last
cialis forum
cialis lawyer ohio
cialis attorneys
cialis attorney columbus
cialis injury lawyer ohio
cialis injury attorney ohio
cialis injury lawyer columbus
prices cialis
cialis lawyers
viagra cialis levitra
cialis lawyer columbus
online generic cialis
daily cialis
cialis injury attorney columbus
cialis attorney ohio
cialis cost
cialis professional
cialis super active
how does cialis work
what does cialis look like
cialis drug
viagra cialis
cialis to buy new zealand
cialis without prescription
free cialis
cialis soft tabs
discount cialis
cialis generic
generic cialis from india
cheap cialis sale online
cialis daily
cialis reviews
cialis generico
how can i take cialis
cheap cialis si
cialis vs viagra
levitra
generic levitra
levitra attorneys
what is better viagra or levitra
viagra cialis levitra
levitra side effects
buy levitra
levitra online
levitra dangers
how does levitra work
levitra lawyers
what is the difference between levitra and viagra
levitra versus viagra
which works better viagra or levitra
buy levitra and overnight shipping
levitra vs viagra
canidan pharmacies levitra
how long does levitra last
viagra cialis levitra
levitra acheter
comprare levitra
levitra ohne rezept
levitra 20mg
levitra senza ricetta
cheapest generic levitra
levitra compra
cheap levitra
levitra overnight
levitra generika
levitra kaufen
Permalink | Technorati Links | Bookmark on del.icio.us | digg it
Categories: Funding, Linux, M&A, Software

Comments RSS feed | Trackback URI

13 Comments»

Collapse Trackback by Profoss news, January 2, 2008 1:03 pm

Open source funding down in Q4 2007…

 
Collapse Pingback by Open source funding plunged in Q4, FY07 | home improvement, January 2, 2008 4:27 pm

[...] Read the rest of this great post here [...]

 
Collapse Comment by NickG, January 2, 2008 6:56 pm

Don’t care about the charts. People who can use Open Source will use it regardless of funding …

 
Collapse Comment by Kanchana, January 3, 2008 3:00 am

Funding may have gone down, however in terms on Open Source consolidation and acquisitions it was much higher than 2006. Regardless of VC funding Open Source is growing heavily and it will grow more in 2008 and beyond.

 
Collapse Comment by Roy Schestowitz, January 3, 2008 7:34 am

Very interesting and not very surprising, Matt. As the meaning of “open source” got so diluted and the business models of some new adopters assimilated to that of proprietary software, it become more apparent that Free software (as in GPL and its derivatives) was the way to go. That’s why GNU/Linux is so far ahead of open source in the enterprise when it comes to adoption.

In short, open source is something else whose value was radically warped. We have to ask ourselves if OSI-approved ‘open source’ means what it used to mean. If not, we’re killing the term and harm everyone who is honest, e.g. Digium, Red Hat, even MySQL. People ought to return to the term “Free software” and just emphasize that it’s about freedom. ‘Open source’ should have been more stubborn and selective. Have I lost hope in ‘open source’ because of the charts? No, that was months ago when I saw the thing devolving and called it quits.

Just my 50 pence and I hope I don’t upset anyone.

Collapse Comment by Matthew Aslett, January 3, 2008 8:48 am

Not sure I agree with the latter part of your comment Roy, but certainly the mixed-source business models means that it is increasingly difficult to point to a particular vendor or investment as “open source”. Larry Augustin also discussed this issue in his post, referenced above. Whether you see this as a success or a failure of open source depends on your point of view.

 
 
Collapse Comment by daryll, January 3, 2008 1:24 pm

Please buy open source software to support it. There is no such thing as totally free. We want commercial support so we must buy open source. But *never* spend a dime on Microsoft products. Open source is really great.

 

[...] 451 Group: Open source funding fell in 2007 January 4th, 2008 by admin The 451 Group has put up an article on the fall in funding for open source companies in 2007. “Disclosed funding deals were down 40.7% to $323.87m for the full year, compared to $546.3m in 2007. While a reduction in funding had been expected after the huge levels seen in 2006, a dramatic reduction in funding during the fourth quarter meant that total funding for 2007 was also lower than the $334.82m raised in 2006.“ [...]

 
Collapse Pingback by My thoughts for the tank: Open Source in 2008 at Boldly Open, January 17, 2008 6:25 pm

[...] 2008 should be FedEx year for commercial Open Source. It's time to deliver: Open Source funding is not exactly dry as a bone, but is definitely taking the plunge (I consider this a good thing, actually). The money has been awarded, now it's time to get to real work and prove our worth. No excuses. [...]

 

[...] it is 1 April, and no I’m not joking. Following the plunge in the fourth quarter of 2007, VC funding started 2008 on a [...]

 

[...] $100.4m in the whole of the first quarter of 2007. It’s an extraordinary turnaround after a dismal fourth quarter of 2008, and helps to explain why the funding level for the last quarter was so low. [...]

 
Collapse Comment by wagon25, June 24, 2008 2:18 am

hey guys, I was searching for a chart controller for my Project and came across an amazing open source charting component called visifire which I thought to share,it has some cool and stunning animations and the quality of charts are awesome and it even helped me to add A+ for my project on my credit thanks to visifire

 
Collapse Pingback by 451 CAOS Theory » Open source funding down 41% in Q3, April 1, 2009 5:43 am

[...] of accuracy this data has now been removed. For a full assessment of VC funding in 2007 see this post. Permalink | Technorati Links | Bookmark on del.icio.us | digg it Categories: Funding, [...]

 

Leave a Comment

Some HTML is allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong> .

Your Comment (smaller size | larger size)