Feb 24, 2022
Due Diligence

Cased: Why We Invested

Manav Narang

Executive Summary

We’re delighted to announce our newest investment in Cased’s Seed II round alongside In-Q-Tel (CIA’s VC arm) and Abstraction Capital, a developer tools and infrastructure focused VC fund. 

Founded by GitHub execs, Cased is re-imagining the developer terminal. Cased makes it easier for developers to work in production. Cased Shell, the terminal for teams, enables users to open a production shell from a browser, collaborate in shared sessions, and brings the confidence of code review to any command – without the hassle of SSH keys. The company has a subscription-based SaaS model priced at $50 per seat/month.

Why We Love It: Cased

Graphical user interface, applicationDescription automatically generated
Solving Key Pain Points

The product aims to solve the mission-critical pain point of improving the developer experience and productivity as the size of the engineering teams grows larger. Improving developer productivity has many tangible benefits: reduces downtime due to production mistakes, eliminates blockers via team members, increases command visibility, and improves compliance to best-practices. 

Common use-cases of the browser terminal include: ssh to the production as easy as logging in to email, enabling code review for production commands, managing interactive run-books and documentation, and providing audit trails and recordings of the browser terminal.

Similar to how Salesforce is to sales teams, Zoom is to communication, or Slack is to team collaboration, the Terminal is a key product for developers and their experience. However, the Terminal has largely not changed since the 1980s and thus, has not been modernized to meet the needs of the developers and organizations today where there is  increased importance of collaboration and user experience even in the developer community.

Hot Market

Market for application software within the Enterprise is large at $1+ trillion, growing at 25% compounded growth rate. 

Containerization, Hybrid Cloud, and platform-as-a-service (PaaS) are driving the secular tailwinds for the need for tools for application software development within the Enterprise. E.g. PaaS provides an abstraction layer (e.g. Cased) between software and all those on-prem-like features or assets that it needs to operate on. This is key for developers because now they can deploy on both on-prem and cloud without changing the source code.

This growth has further accelerated, driven by COVID-19 digitalization trends across all sectors. This means there will be a growing need for tools for mobile development and integration, code assist, feedback and analysis, automation and workflow, API management, development environments, and visual testing over the next decade. 

Cased stands to benefit from these trends and will be a critical product like SalesForce, Zoom, and Slack for managing developer workflow using a widely-used web browser. We believe Cased can be as big as GitHub (acquired by Microsoft for $7.5 billion) and GitLab ($15 billion market cap).

Founders & Advisors with deep domain expertise from GitHub

Founders worked together for four and half years while holding complementary senior executive positions at GitHub, which was acquired by Microsoft for $7.5 billion in 2018.

  • Ted Nyman (Co-Founder & CEO) was the former CTO & VP, Engineering at GitHub
  • Ben Bleikamp (Co-Founder & CPO) was the former Director, Product at GitHub
  • 3 of the 4 Advisors come from GitHub and GitLab, the 2 largest software development platforms designed to build software for open source and private projects in organizations
  • Paul St. John: ex-VP, World Wide Sales at GitHub
  • Vlado Herman: ex-CFO at GitHub (& Yelp)
  • Eric Johnson: CTO/EVP at GitLab & BOD at The Linux Foundation
  • Cipora Herman: CFO at 2028 Olympics, ex-VP at Facebook & BOD at Opendoor, ZipRecruiter and Overlay
Investing alongside top-tier co-investors

Key investors include like Founders Fund, In-Q-Tel, Abstraction Capital. Founders Fund invested in Cased’s prior Seed round ($2.25 million Seed at $10 million post-money in 2020) and is reinvesting in the current.

Other name brand investors in the current round are In-Q-Tel (CIA’s VC arm), Abstraction Capital (category focussed fund focussed on investing in developer tools and infrastructure) which further strengthen the bet on the category

Strong Evidence of Product-Market Fit

100% of users are daily active users; Beta customers and design partners asking to pay; Pricing feedback from customers is trending towards the high-end of developer tools.

Use-cases are expanding as engineering teams are growing with the addition of product managers and designers. Engineering leaders at Postmates, Uber, Stripe, Facebook, Robinhood have all confirmed they had to build tooling around these problems -- showcasing a strong need for Cased like tools. 

Heightened VC Activity

Developer Experience space is emerging with VCs increasingly deploying capital at Seed stage

  • DevRev (Dev Centric CRM): Raised $50M funding from Mayfield Fund, Khosla Ventures
  • Fig (Visual apps for terminal): Founded in 2020. Raised $2M Seed, led by General Catalyst in Aug 2021
  • Warp (Everyday Terminal): Founded in 2020. Seed-funded by Essence Venture Capital. In Stealth

GoingVC Partners is the investment vehicle of GoingVC. Interested in co-investing? Join GoingVC Angels for access to high-quality, pre-diligenced deal flow and opportunities like this. For more about GoingVC Partners, click here.

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