Cloudthread, an analytics startup based in San Francisco, has raised $3 million in seed funding to help engineering teams build with cost and environmental efficiency in the cloud.
The seed funding round was led by Peak State Ventures, with participation from Global Founders Capital, Soma Capital, and Lombard Street Ventures, Various angel investors including Patrick Wendel (Co-Founder, Databricks), Renaud Visage (Co-Founder, Eventbrite), Jason Child (CFO, Splunk), Zack Kanter (Founder, Stedi), Ashley Smith (ex-CMO, Gitlab), also participated in this round.
Jason Freedman, Partner at Peak State Ventures, believes that successful engineering organizations need to empower their teams to easily consider cloud spending when building. He referred to this need and the firm’s participation in the round by stating:
“What we liked about Daniele, Ilia, and Thomas is how well they knew their customers. It was that from the outset that convinced Peak State to want to lead their seed round. Not only has this team built technology that empowers a culture of responsibility at their last company, they also are deeply embedded into the engineering leaders at the best companies who are currently thinking about this problem. For most companies, reducing cloud or infrastructure spend is relegated to some IT department that doesn’t care about the engineer experience. But the world has changed. Companies not only spend tremendous amounts to recruit great engineering talent, they need to re-recruit them every single day. And a big requirement of engineers is having the ability to use the tools that they need to build their product. Cloudthread’s reason for being lies between these leaders that are empowering their engineers and the CFO’s office that sees cloud spending increasing dramatically. Cloudthread helps engineers make great decisions and gives the CFO’s office transparency. It’s the way organizations should work If they’re successful, they’ll help engineering orgs everywhere empower their people with both resources and responsibility. And keep those CFOs happy.”
Cloudthread was founded in 2020 with the mission of changing how engineering teams approached cloud deployment at a time when organizations struggle to understand whether they’re getting consistent value out of the cloud through growth and seasonal fluctuations. The startup achieves this via its initial solution, which focuses on cost efficiency monitoring, combining cloud cost and application usage data to create unit metrics that map to the value that a certain application or team is getting from the cloud.
Daniele Packard, Ilia Semenov, and Thomas Yopes grappled with the challenge of understanding cloud costs in various ways before joining forces to found Cloudthread. Cost efficiency monitoring is a stepping stone in the Startup’s Cloud Cost Telemetry vision, creating a comprehensive tool kit for engineering teams to build, monitor, and forecast in the cloud with confidence. Ilia Semenov, former data lead for Lyft’s internal cloud cost management solution and now Cloudthread’s Chief Product Officer, said in this regard:
“Until now, only advanced companies like Netflix and Lyft were able to fully optimize their cloud costs by building complex data pipelines and delivering insights all the way into engineering processes. But we all use the cloud and want to be confident in our cost efficiency without significant in-house development efforts. At Cloudthread we do the heavy lifting and seamlessly integrate cost efficiency into engineering workflows.”
Cloudthread plans to use the new financing to hire, accelerate growth, and continue building out its product suite.
According to Gartner, the public cloud market grew by 40.7% to over $60B in 2020, and IT leaders estimate that more than 30% of cloud spending is wasted. The cloud transformed infrastructure purchasing, empowering engineering teams to spin up resources with a few clicks and giving finance a single, inscrutable line item to account for it. Engineering teams have been given the power to seamlessly incur costs without the ability to take responsibility and ownership of those costs. Cloudthread aims to change this and make it easy for engineering teams to incorporate cloud costs into their decision-making without disruption.