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.