Incredibuild, an Israeli startup that has gained a lot of traction in the world of gaming and software development for a platform that will dramatically speed up (and reduce costs) the shipping of code and associated collateral during build and test, has raised some capital , to accelerate its own development. The company has raised $35 million in a Series B funding round — money it will use for product development and to strengthen its ecosystem with increased investment in community, developer relationships and cloud programs in more markets.
This all-equity round will be led by Hiro Capital and will include former Insight Partners contributors. We know from sources close to the startup that the money comes with a doubling of its valuation: When Incredibuild last raised funds — $140 million in March 2021, led by Insight, which took a large stake in the company at the time — was it at a valuation of 300 to 400 million dollars. The company doubled its ARR last year, and while it doesn’t release the actual figure, this round is likely to put its current valuation at nearly $800 million.
If it sounds strange that a Series B would be so much smaller than Series A, that’s partly because the previous round was a mix of debt and equity: the company had raised very little since its inception in 2000 and was profitable.
These newer rounds should give the company — which counts companies like Epic, EA, Nintendo, Sony, Microsoft, Adobe, and Citibank among its 1,000 customers — capital to develop new products on top of those that are already doing well. (Hiro is a VC focused on gaming, creator platforms, and Metaverse tech so may be able to help on that front.)
One example of how Incredibuild has evolved its product is the company’s deeper move into the cloud. The first iterations of Incredibuild, and still one of its biggest use cases, aimed to help organizations distribute computing power to their own on-premises machines.
In a concept not dissimilar (but not exactly the same) to the peer-to-peer network, the idea is that the organization’s network should have CPU idle at all times to effectively break up large code and distribute it to run in real-time across those CPUs and then reintegrate at a final endpoint. Cloud computing has also been integrated over time.
“It’s a kind of grid computing,” said Tami Mazel Shachar, the CEO, in an interview, “but the secret ingredient is Incredibuild’s approach to parallelism and virtualization. Nothing needs to be installed on the remote computer.”
And last, last year, judging by what some of his customers are doing, It’s taken an even deeper step into the cloud: it’s now partnered with AWS and Microsoft to integrate Incredibuild technology directly into gaming stacks running on those companies’ respective cloud platforms, with the idea embodied in it using many small compute units simultaneously in the cloud is proving cheaper and now faster than simply running a process across the largest single compute platform on a platform.
“If I have a large process with millions of lines of code that would take a 64-core computer to process, it’s considered expensive and takes 10 hours,” he said shachar. “But if I take 400 4-core machines and run that for five minutes, it’s cheaper, shorter, and runs in less time.”
She added that it has yet to provide companies with tools to run computing across different cloud providers, and it has yet to build similarly deep integration with Google’s cloud platform: Demand from customers is one of those use cases not there (not yet, at least).
And while cloud usage continues to grow, the real story still seems to be a lot of motivation to get the most out of on-premises devices.
“Most of our users are local and then burst to the cloud when they have a spike or a need,” she said.
The big picture for why Incredibuild has grown so well is that its product addresses three key factors in today’s market, Shachar said.
The first is that if you believe that “the metaverse” is more than just a marketing concept, it will require significantly more computing power, and as many companies realize, the solution to this will not only be hardware, but also software, which can intelligently optimize the use of existing hardware.
That ties into the second factor, which is that the chip shortage will make it difficult to continue to rely on hardware.
The third factor is that the growing drive for more media-heavy code and more digitized services overall is leading to a massive drain on human capital: there aren’t enough software developers out there. That’s fueling a market for more software automation to do some of the busy work.
Interestingly, the other big theme in distributed computing has been the big push towards decentralization in finance, particularly in areas like cryptocurrency. This is something Incredibuild hasn’t really touched on yet, but I was wondering if their cheaper and more efficient distribution approach could ever be applied there, given the bad reputation crypto mining has for the energy and other resources it consumes.
“The idea of crypto has been explored,” Shachar said. “It’s not in our near future, but definitely an option. It’s a matter of focus.”
The fact that Incredibuild’s focus to date has put it in a pretty good spot as a startup and cash-generating company is an indication that it may well be on the right track.
“Game companies are feeling the bottleneck in developer capacity. Incredibuild gives developers valuable time back by speeding up build compilation,” said Cherry Freeman, co-financing partner at Hiro Capital, in a statement. “Amazing gaming companies like Tencent, Take Two, EA, Konami, Nintendo, Capcom, and WB Games are already reaping the benefits of Incredibuild, and we hope more companies will discover and leverage their brilliant technology. As always, games are at the forefront of technological advances, and we envision a future where Incredibuild will be the de facto distributed supercomputer on every machine in every enterprise.”