Sequoia Capital plans to fund up to three open source software developers annually, following on from a program that debuted last year.
The venture capital firm of Silicon Valley was announced the Sequoia Open Source Fellowship last May, but it was initially offered by invitation only with only one recipient to shout out so far. Moving forward, Sequoia is inviting developers to apply for a grant that will cover their costs for up to a year so they can work full-time on the project — without giving up any equity or ownership.
Underfunding
It’s no secret that open source software has a chronic underfunding problem, a fact that only seems to enter the mainstream consciousness whenever a major security flaw like Log4Shell wreaks havoc on the software supply chain.
Volunteer contributors are often the main driving force behind the building blocks of some of the world’s most widely used apps, usually having to fit their open source “passion projects” in between the work that actually pays their bills. The wider world is generally fine with this arrangement until something goes wrong, in which case governments step in with executive orders and belatedly imposed regulations on industry to make the software supply chain a little more robust.
Such regulations have forced Big Tech to work together around new funding initiatives to support developers behind some of the most critical pieces of open source software, while companies like Spotify, Salesforceand even Bloomberg they have also started their own grant programs.
But these various funding initiatives have little to do with pure altruism. Companies that raise capital typically identify the open source software they rely on the most and then allocate capital accordingly—it’s ultimately about protecting their own business while also currying favor with a community they need and can still and wish to hire in the future.
Slight return
So how does all this translate to the realm of venture capital — why would Sequoia want to fund software developers without a financial return on its investment? Well, as with other similar funds out there, Sequoia may not be able to get its cash back immediately, but it will benefit in other ways – it’s a “big picture” investment, not a charitable donation.
You only have to look at some of the companies Sequoia has invested in over the years to get an idea of where its head is with this game – it previously backed the likes of MongoDB (a $34 billion database behemoth which subsequently abandoned its open source roots) and Confluent, the company behind the open source Apache Kafka streaming processing platform.
“Open source has really become the lifeblood of software these days – when you look under the hood of even proprietary software today, it’s very dependent on open source libraries and open source packages,” Sequoia Partner Bogomil Balkansky he told TechCrunch via email. “Open source is what the world runs on, with what computer systems run on today.”
Most recently, Sequoia backed open source startup PartyKit, which builds real-time multiplayer infrastructure for any application, as well as open source microservices orchestration platform Temporal. Elsewhere, Sequoia also invested in Coana, which, while not open source itself, helps companies prioritize vulnerabilities in their open source software stack.
But one investment in particular really illuminates the purpose of Sequoia’s new scholarship. Last year, Sequoia backed startup Pydantic, which is seeking to commercialize its popular Python library and open source data validation framework of the same name, used by Alphabet, Amazon, Apple, Meta, Microsoft, among other notable companies .
What’s interesting here is that Pydantic is heavily based FastAPI, an open source web framework for building APIs. FastAPI was created by Sebastián Ramírez Montañoa Berlin-based Colombian software developer who became the inaugural (and so far only) recipient of Sequoia’s scholarship last year.
FastAPI’s Sebastián Ramírez is joined by Sequoia’s Lauren Reeder and Bogomil Balkansky Image credits: Sequoia Capital
What this highlights is that some open source projects naturally lend themselves to becoming fully commoditized entities, while others are more like lego blocks that, while no less important, are difficult to immediately monetize.
“The open source world is somewhat divided between projects that can be commercialized and projects that are very important, very influential, but just can’t be made into companies,” Balkansky said. “For those that can become great companies, we at Sequoia have a long history of working with them and will continue to work with these founders and creators.”
And that’s why Sequoia is making two separate financial commitments to two different kinds of open source entities, using grants to support foundational projects that might be critical to one of the companies in which it has a direct stake.
“For Sequoia to succeed and for our portfolio of companies that we work with to succeed, there is this vital class of open source developer work that needs to be supported for the entire ecosystem to function well,” Balkansky added.
Starting today, Sequoia said it will accept applications from “any developer” working on an open source project, with considerations made on a “rolling basis” moving forward. Funding will include living expenses paid in monthly installments for up to a year, allowing the developer to focus entirely on the project without worrying about how to put food on the table.
“We want to support open source creators and projects that have real-world adoption,” Sequoia Partner Lauren Reeder he told TechCrunch. “A lot of these developers are trying to balance their OSS [open source software] project as well as full-time or even multiple part-time positions, in some cases. We want to fund the things that have the biggest impact.”
