Wheelings & Dealings: Expanding IaaS Provider DigitalOcean Receives $37.2 Million in Series A Funding

In major news for the IaaS and cloud space, DigitalOcean has scored $37.2 million in Series A funding, led by Andreesen Horowitz. The amount is significant for a first funding round, particularly within the IaaS space, and a vote of confidence in DigitalOcean’s unique IaaS services, which use solid-state drive (SSD) servers exclusively.

Smaller IaaS providers have been increasingly ramping up their game in the relatively sparse IaaS arena, which is currently dominated by Amazon Web Services (AWS). While Microsoft, Google and IBM have all supercharged their cloud initiatives over the past couple of years, smaller players like DigitalOcean have been steadily scooping up market share based on niche, customized offerings.

Digital Ocean offers IaaS through its data centers in Amsterdam, New York, San Francisco and Singapore. The company touts its simplicity as well as the ability to offer a high performance cloud because of its exclusive use of SSD servers. SSD servers do not contain actual disks but rather store data persistently using integrated circuit assemblies as memory. This offers advantages for speed of data processing as well as high levels of availability.

"The funding is enormous for us because it will allow us to hire a lot more engineers, Ruby engineers, to help us build new features and help us build a better cloud for developers," said Mitch Wainer, co-founder and chief marketing officer at DigitalOcean.

The company also plans to boost capacity and build new data centers, as well as build the DigitalOcean brand by networking with developers at conferences and other industry events. The IaaS provider is also working on adding PaaS services to their platform, which will make them even more competitive.

"We're focused on building right now internally a PaaS model where we're going to provide one-click provisioning for different images,” said Rainer. “So for example, a Rails image. These will be provided to make it easier for developers to instantly create new servers with preconfigured setups. For the standalone PaaS guys, like Heroku, they're going to have more competition."