Render raises $100 million at $1.5 billion valuation

Venture capitalists are doubling down on Render, a startup offering easy-to-use cloud infrastructure. On Tuesday it said it has raised $100 million in funding at a $1.5 billion valuation.

The lucrative cloud computing world, dominated by Amazon, Microsoft and Alphabet, has become more competitive since the arrival of OpenAI’s ChatGPT assistant in 2022. Companies such as CoreWeave that rent out Nvidia graphics cards for training artificial intelligence models have grown into mature businesses. Meanwhile, people are asking AI models to write software for them, and seeking advice on where to run the new programs.

Render is among the beneficiaries of this emerging dynamic. Its revenue growth is well above 100%, and more than 4.5 million developers use its tools, Anurag Goel, its co-founder and CEO, told CNBC in an interview.

The startup was founded in 2018 and is based in San Francisco, with about 100 employees. Investors include 01A, Addition, Bessemer Venture Partners, General Catalyst and Georgian Partners. With the new capital, Render will hire additional technical staff members to build features.

Render runs its software on Amazon Web Services and Google Cloud Platform. Recently, Render has also been testing the use of its own servers. Expanding the initiative might reduce Render’s costs and yield lower prices.

“We get more control over the kinds of things we can do, but the cost basis is just very different,” said Goel, who was the eighth employee at Stripe, the payment processor.

But greater reliance on in-house computing power brings new risks, because the company must ensure that it always has enough servers on hand. If the strategy works out, it could boost efficiency for customers, such as Alibaba, CBS, Hodinkee, Paradigm, Shopify and AI-fueled app builder Base44.

The founder of Base44, Maor Shlomo, had used AWS at his previous startup, Explorium, and this time he wanted something different.

“I was all by myself, and so I was searching for services that can automate most of the stuff so that I don’t need to deal with infrastructure, even if it will cost slightly more that,” Shlomo said. He signed up for Render.

After website builder Wix bought Base44 last June, Shlomo asked to invest in Render, given his experience. Now he’s a shareholder and a customer.

“It’s such a great product that we don’t need someone that’s focused only on Render,” he said.

Before Render, there was Heroku, a pioneer of the platform as a service category that runs on top of AWS. Salesforce acquired it for about $217 million in 2011. Earlier this month, Salesforce said it was backing away from developing new features for Heroku.

“People now know that they’re not going to add new features to it, so they’re looking around for the most mature alternative,” Goel said.

OpenAI — which has committed to spending more than $600 billion with the Amazon, Cerebras, CoreWeave, Microsoft and Oracle clouds in recent months — uses Render. The AI lab’s Codex coding app allows people to deploy web apps they create on Render. Codex users can also choose to deploy their apps on Cloudflare, Netlify and Vercel. In September, Vercel said it raised capital at a $9.3 billion valuation. Goel said companies such as AI spreadsheet specialist Shortcut have moved to Render from Vercel.

It doesn’t hurt that ChatGPT recommends that people consider Render in certain scenarios, Goel said.

“Chatbots have effectively, almost singlehandedly, grown our business,” he said.