Open Source web server leader NGINX closes $3 million series A funding round

SAN FRANCISCO, USA & MOSCOW, RUSSIA: Open source web server developer NGINX has received $3 million in a fully subscribed Series A round. NGINX powers over 40,000,000 domains on the Internet, and over 20 percent of the top 1,000 busiest websites around the world, including Facebook, Zappos, Groupon, LivingSocial, Hulu, TechCrunch, Dropbox and WordPress.

NGINX’s unique ability to deliver 10 times performance improvements on existing hardware— combined with lean architecture, scalability and security—has propelled the company’s ascent as the fastest and only-growing web server in the world with a market share of 8.5 percent across all domains. In its most recent survey, Netcraft states, “If current trends continue NGINX will soon overtake Microsoft to have the second largest number of active sites.”

The investment includes funding from BV Capital and Runa Capital and an entity affiliated with MSD Capital, the private investment firm for Dell Inc. chairman and CEO Michael S. Dell. The funding will be used to support the company's plans for its new commercial arm, Nginx Inc., and its expansion into the US.

“By ensuring on-demand, high performance infrastructure product matching the needs of modern online businesses, NGINX has established itself as the second most popular open source web server in the world and the only one with a growing market share,” said Dmitry Chikhachev of Runa Capital. “It all makes the company a very attractive investment, particularly as NGINX prepares to build on its success with the launch of new commercial solutions.”

“Several of the companies we invested in were able to solve significant scaling issues by switching their web platforms to NGINX,” said Thomas Gieselmann of BV Capital. “NGINX transparently and effectively enables the growth of the largest sites on the Internet today."

NGINX will open its new San Francisco headquarters in Q4 2011. The company has already signed its first commercial customers and is currently establishing business and technology partnerships in the US, Europe and Asia.

“The timing in the market may be prime for NGINX as a newly funded and strong-trajectory software company—and one which has done so little in the way of marketing,” commented Agatha Poon of analyst firm Tier1 Research. “For service providers, there is another choice in the market for workloads that are becoming increasingly demanding.”

In the middle of 2012, NGINX will offer a commercial-grade connection processing and optimization software platform, which will enable advanced performance, traffic management, extended configuration and security features for hosting, cloud and enterprise server infrastructure. NGINX will also offer flexible options to upgrade existing web installations to modern and efficient high density web software.