When concerns about the novel coronavirus – and subsequent changes in activity – don’t stop productivity (and possibly especially at times when it’s possible to be as efficient as possible), one of the major IT trends has been a try Optimizing the way people work Work by creating better integrations between the different apps they use. Today, a startup from Berlin is announcing start-up funding to support the struggle of those who help make these integrations seamless and reliable.
n8n, a Berlin-based company that has developed a workflow automation platform with “fair code” that developers can use to quickly integrate all the apps they work with automatically – from standard third-party APIs to internal tools developed by developers self-created raised a $ 1.5 million launch round to further expand its service and, in particular, to launch its first commercial elements after its existence was announced last October and an unexpected surge in interest was noted.
“I was surprised, but it seems like people have been waiting for me, ”said Jan Oberhauser, founder and CEO of n8n, in an interview, adding that n8n Has has so far absorbed “a lot of traction”.
The investment is jointly managed by UK’s First-Minute-Capital and Sequoia, which also include Runa Capital, Tiny VC and System.One, as well as Kevin Hartz, co-founder of Eventbrite & Xoom, Ilkka Paananen, co-founder of Supercell, and Nan Li and Daniel Liem from Obvious Ventures (individually, not via Obvious).
Within this rather impressive list, investments are a significant step, especially for Sequoia, as it is the renowned company’s first start-up capital investment in Germany, while the region is being promoted much more. The Silicon Valley VC has quietly taken root in the European market in recent months, including finding talent and local deals. The first hiring in this process was announced this week: Luciana Lixandru, who has been recruited from Accel for years, is the company’s first European partner, but this does not currently extend to raising a local fund.
“We are currently not launching any funds in Europe,” a source near Sequoia told TechCrunch. “We continue to invest [in Europe] from the US fund. “
There are a number of other companies, startups, and much larger outfits that have recognized the opportunity to develop tools that developers and others who are less technical can use to put different apps together. This includes other startups like Zapier, RapidAPI and Tray.io, as well as companies like MuleSoft (acquired by Salesforce for the princely sum of $ 6.5 billion) that have come out of the startup phase of life.
Oberhauser is aware of all of this because he is a developer himself who has tried them all – and found them to be deficient for several reasons. Either they were too expensive, or not flexible or robust enough to be used in the multitude of niche applications that he had used in film production in his previous life, or they required a lot of reading arcane documentation or were not scalable or not scalable on the infrastructure of his own company and not in the cloud. His answer was to build n8n, first for his own purposes, and then consider how it could be something that could be turned into a service for others.
One of the unique things about n8n is that it is not “open source” per se, but is based on a model that is similar to the model and is called “fair code”.
As outlined in this review, the idea is to inherit some of the free and flexible aspects of building open source (and developing third-party developers) while trying to build a model that the original developer of the code uses You can earn money from it – either by offering services (similar to integration and other work related to open source) – or by charging fees if the user exceeds a certain size or wants to use them it in a different format, like a SaaS model.
Oberhauser is not only a user of fair code, but has developed into a pioneering entrepreneur in this field and also helped to run a website with the appropriate name Fair-Code.io in order to encourage more developers of fair code.
“Free and sustainable; open but pragmatic; community-oriented; meritocratic and fair ”describes n8n, although there are definitely plans for n8n to include monetizing elements in the mix.
The current version can be hosted locally by a user – which in itself is an essential part of the proposal for companies to comply with certain data protection regulations or to protect themselves against changes that could occur with n8n over time – and this remains free to use.
“If the company goes bankrupt or changes policies, you’re in trouble,” said Oberhauser of platforms that don’t share their code freely. “That means they can never go to insurance companies or government organizations, for example. And people really like and care about data protection and are becoming more like that every day. You want to own and change it. Developers want to have access to the underlying code and be able to easily extend it. You can integrate and use what we have built forever. “
However, N8n is also planning to launch a version under a SaaS model that is calculated for a typical SaaS subscription model and is expected to be released next month. “If you want to run it in our cloud, you pay a fee,” said Oberhauser.
The second way to make money is through advice, support, and integration services that are expected to take another year to start (remember that the startup is only five months old).
The third area to make money will be royalties for larger users (a size that has not yet been determined), but even now the service as it is “can be provided to 1 million people” and is still free, said Oberhauser.
Right place, right time
Oberhauser, pictured here, said his startup noticed Sequoia and the London-based company firstminute (the London-based VC co-founded by Brent Hoberman, Spencer Crawley and Henry Lane-Fox, who specializes in early-stage investments and counts VCs like Atomico as partners). through the answers he got to his brief post on HackerNews and the subsequent hunt for Product Hunt.
n8n was invited to Y Combinator to become part of his cohort, but declined to do so because Oberhauser did not want to move from Berlin, where he had a young family to support, and where he wanted to start the company (including joining YC) Integration into Delaware, which Oberhauser was not interested in either). In fact, he built the entire n8n bootstrap as a side job while working part-time in other locations. This was the need for income before this start round.
This type of grit, combined with identifying and addressing a clear market niche that scalably addresses the needs of a defined audience (in this case, the developer), demonstrating the immediate interest and acceptance of the target market. seemed to make the startup a breeze for funding.
“As talent becomes scarcer, every company wants to get more out of great people,” said Matthew Miller, a Sequoia partner who also worked closely with Docker, Confluent, Tessian, and Graphcore, in a statement. “This leads to an increase in automation solutions in every industry. We were impressed by the early introduction of n8n to the open source community and Jan’s vision to develop an open and flexible solution in this area, and we are delighted to have n8n as our first seed investment in Germany. “
Although Sequoia has not yet established a full-fledged outpost here, sources have told us (and there have been reports) that this is intended with the schedule to be set up later this year. This is associated with the reservation of recent events related to the novel coronavirus pandemic, which included a huge decline in stock markets and a comprehensive re-evaluation of business activities that could change this course significantly.
In general, however, it would be a big vote of confidence in the region if Sequoia, in which some of the best-known startup exits in recent years have been involved, has Facebook’s best-known $ 19 billion acquisition of WhatsApp, a larger office in Europe . European VC company Atomico forecast in November 2019 that $ 35 billion would be invested in European technology this year, a flood brand for the region. This is a chance, both in terms of simply more startups and later rounds for the largest of these two areas in which Sequoia would like to be more active is my guess.
Although Sequoia has not yet announced a European fund, the company currently appears to have no shortage of funds. It was reported last month that the VC is currently collecting new $ 1.3 billion earmarked for Asia. It was not until late December that papers were submitted to raise $ 1 billion for US growth rounds and $ 2.4 billion for China.
In any case, Sequoia is increasingly involved in Europe without (at this point in time) committing itself to region-specific funds.
Even before Lixandru was hired (a hiring that had been worked on since last year), the company had invested in Europe for years, including investments in Skyscanner (acquired by Ctrip), Wunderlist (acquired by Microsoft). and more recently Tessian.
This latest funding in n8n shows how diversification is now impacting a wider range of investment opportunities. This does not only include previous rounds like this first start-up capital investment in Germany. But also newer technologies: For example, as part of the investor group that put $ 12 million in the Argent cryptocurrency wallet earlier this week.