A recent report from the Economist sheds light on the concerns and rewards of running a commercial open source software startup. The study found that while most startups succeed in growing their businesses, some do better than others. COSS startups—those built around selling access to code rather than products or services—were found to be the fastest growing type of business, with an annual growth rate of more than 40% between 2014 and 2018. This is likely due to their appeal as a sustainable funding model: once a COSS has achieved early success, it can continue to draw new users without needing additional capital expenditures. In contrast, legacy software companies must continually beg for investment in order to stay afloat; COSSs are less subject to market volatility and can instead focus on long-term
Given the historic affiliation between Silicon Valley and open source, it comes as no surprise that venture capital firms have begun funneling money into companies with open source foundations. This trend is likely to continue, given the clear benefits of open source for businesses.
The growth of open source startups has become a popular topic of discussion in recent years, with many companies looking to adopt this approach for greater efficiency and cost-savings. Runa, a startup that monitors and analyses these trends, recently published its first annual report on the fastest-growing COSS startups throughout the whole of 2022. The findings suggest that there are several key themes driving this growth: shifting attitudes towards software development, increased focus on customer experience and growing interest in blockchain technology. Looking ahead, Runa predicts that these trends will continue in the coming year, with even more disruptive innovations taking hold across all sectors of the open source ecosystem.
Fast growing
Looking at the top 50 fastest-growing open source companies, it is clear that Builder.io, a no-code platform for digital storefronts; Novu, which is creating a notification infrastructure for developers; Refine, a framework for web app development; Safing, which is creating data privacy products including an application firewall; and Nhost, a backend-as-a-service provider that’s setting out to rival Firebase are leading the pack. These companies are paving the way for future innovations in online commerce and developer productivity.
The top 50 fastest-growing open source startups in 2022 are poised to revolutionize the way we interact with technology, reshaping how we work, live, and play. These startups will provide users with new tools and platforms that make their lives easier and more efficient, while also revolutionizing the way businesses operate.
VC funding for startups is becoming increasingly important as the market continues to grow. This can be seen in the 44% of companies that have raised VC funding since the beginning of 2022, including low-code web app developer Appsmith, which landed $41 million, and another Firebase rival called Appwrite, which secured $27 million. These investments will help these startups continue to grow and compete in a competitive industry.
