A San Francisco-based open-source software company, NGINX says the funds raised will be used to “accelerate its mission to help enterprises on their journey to microservices – a modern approach to application development”.

The investment arm of Telstra — Telstra Ventures — was NGINX’s first investor when it announced in April 2016 it had taken a stake in the company.

At the time Telstra didn’t reveal the extent of its investment in NGINX, nor confirm reports of an investment of around $10 million. However, some media reports put the initial investment at $8 million.

Announcing this latest capital raising of $43 million on Thursday, Goldman Sachs said total funding of the company has now reached $103 million and NGINX planned to accelerate global expansion with the introduction of a new, global channel program and open additional offices to meet increasing demand, particularly in the APAC region.

According to Goldman Sachs, NGINX has experienced tremendous growth and customer traction, including adoption by more than 30% of the Fortune 50.

“As a former IT executive, I’ve seen what it takes to manage enterprise applications at scale. We took a hard look at many of the emerging vendors helping enterprises scale and modernise their applications. We invested in NGINX for three key reasons,” says David Campbell, a managing director in Goldman Sachs’ Merchant Banking Division who will join the NGINX board of directors as part of the investment.

“First, NGINX is a globally recognised technology leader with a pervasive footprint and adoption by more than half of the busiest websites in the world. Secondly, we believe NGINX’s open source approach and participation in the Linux ecosystem gives them unique advantage over the traditional proprietary appliance business models. And critically, the NGINX management team has the proven experience it takes to execute and gain commercial traction.”

“We’re excited to welcome Goldman Sachs as we believe they’re the right partner to support us in driving adoption of the NGINX Application Platform and extending our leadership in microservices enablement,” said Gus Robertson, chief executive of NGINX.

“In the last 18 months, NGINX has introduced six new technologies to the platform to accelerate the modernisation of our customers’ application infrastructure. Goldman Sachs brings real-world experience managing mission critical applications (both legacy and new), which will help us further accelerate our platform vision.”

Goldman Sachs cited a report by Gartner Research that 47% of chief executive officers said they were being challenged by the board of directors to make progress in digital business – and which went on to predict that by 2023, while 90% of current applications would still be in use, most would have received insufficient modernisation investment.

“NGINX is uniquely positioned to capitalise on this opportunity and help enterprises at each step of the modernisation journey – a market projected to reach US$32.01 billion by 2023 and growing at more than 16% compound annual growth rate,” Goldman Sachs noted.

In its first four years, Goldman Sacs says NGINX has:

• Captured 400 million websites globally, which is one-third of all websites. This includes two-thirds of the 10,000 busiest and most demanding sites.
• Grown to more than 1500 customers. Three of the five largest global banks, three of the five largest US retails, and five of the 10 largest technology companies trust NGINX.
• Achieved 100% year-over-year growth for four straight years – and is focused on maintaining a similar trajectory.