Incredibuild, an Israeli startup that has gained traction in the gaming and software development world for a platform that dramatically speeds up (and lowers costs) the transmission of code and related collateral during build and testing — 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 equity round is led by Hiro Capital, in which Insight Partners from the past also participate. We understand from sources close to the startup that the money is coming in with a doubling of valuation: When Incredibuild last raised money — $140 million in March 2021 led by Insight, which took a large stake in the company at the time — it was at a valuation of $300 to $400 million. The company has doubled its ARR in the past year, and while it won’t disclose the actual figure, this round will likely bring its current valuation to nearly $800 million.
If it sounds odd that a Series B would be that much smaller than the Series A, it’s partly because that previous round was a mix of debt and equity: The company had raised very little since its inception in 2000 and was profitable.
These more recent rounds were designed to give the company — which counts companies like Epic, EA, Nintendo, Sony, Microsoft, Adobe and Citibank among its 1,000 customers — capital to build new products on top of those that were already doing well. (Hiro is a VC who focuses on gaming, creator platforms and metaverse technology; and so it might help on that front.)
An example of how Incredibuild has developed its product is the company’s deeper move to the cloud. The first iterations of Incredibuild, and still one of its largest use cases, were aimed at helping organizations distribute compute across their own on-premise machines.
In a concept similar to (but not exactly the same as) peer-to-peer networking, the idea is that there is an inactive CPU in the network of organizations at any time, so Incredibuild has developed a way to identify gaps, as well as effectively distribute and distribute heavy code to run across those CPUs in real time and then be reintegrated on a final endpoint. Over time, cloud computing was added.
“It’s a flavor of grid computing,” Tami Mazel Shachar, the CEO, in an interview“But the secret sauce is Incredibuild’s approach to parallelization and virtualization. There is no need to install anything on the remote computer.”
And most recently, in the past year, follow what some of its customers are doing, it has taken an even deeper step to the cloud: it has now signed partnerships with AWS and Microsoft integrating the Incredibuild technology directly into gaming stacks running on those companies’ respective cloud platforms, with the idea that using many small pieces of computer in the cloud simultaneously is cheaper and now faster than simply running a process over the largest single computer of any platform platform.
“If I have a heavy process, millions of lines of code, that would require a 64-core machine to process, it’s considered expensive and will take 10 hours,” said shachar† “But if I take 400 4-core machines and run them for five minutes, it’s cheaper, shorter, and runs in less time.”
She added that it has yet to provide businesses with tools to run computers across different cloud providers, and that it has yet to build similar deep integration with Google’s cloud platform: customer demand for any of those use cases is not there. (not yet, at least).
And although cloud is increasingly used, the real story still seems to be a lot of motivation to get the most out of on-premise equipment.
“Most of our users are on-premises and then move to the cloud when they have a peak or need,” she said.
The bigger picture why Incredibuild is growing well is because the 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 requires significantly more computing power, and as many organizations are beginning to realize, the solution for that will rely not just on hardware, but also software that uses intelligently optimize existing hardware.
This is related to the second factor, which is that it will be difficult to continue to rely on hardware due to the chip shortage.
The third factor is that the growing push for more media-intensive code and more digitized services in general is putting enormous pressure on human capital: there are not enough software developers. That drives a market for more software automation, to take some of the busy work out.
Interestingly, the other big theme in distributed computing has been the big push around decentralization in finance, particularly in areas like cryptocurrency. This isn’t something that Incredibuild has really touched on yet, but I asked if the cheaper and more efficient approach to distribution could ever be adopted there, given the bad rap crypto mining it’s had for the energy and other resources it consumes .
“The idea of crypto has been looked at,” Shachar said. “It’s not in our near future, but definitely an option. It’s a matter of focus.”
The fact that the focus so far has put Incredibuild in a pretty good position as a start-up and money-generating company is an indication that it could be on the right track.
“Game companies are feeling the shortage in developer capacity. Incredibuild gives developers valuable time back by speeding up build compilation,” Cherry Freeman, co-funding partner at Hiro Capital, said in a statement. “Great games companies such as 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 advancement and we envision a future where Incredibuild will be the de facto distributed supercomputer on every machine in every company.”