Mermaid, the revolutionary open source tool for creating diagrams and charts, has become a beloved tool in the developer community for its Markdown-like language. The mastermind behind Mermaid, Knut Sveidqvist, came up with the idea while working as a software architect. The project was then offered as an open source tool without any plans for monetization. However, in 2022, Sveidqvist was approached by Open Core Ventures (OCV), a venture capital firm founded by Sid Sijbrandij, the creator of GitLab, who paired him with serial entrepreneur and investor Andrew Firestone as the CEO.
The company, specializing in hosted services for the open source project, recently announced a successful seed funding round of $7.5 million from OCV, Sequoia, and M12 fund by Microsoft, along with other notable investors.
“There’s some irony in Microsoft investing in Mermaid now,” Sveidqvist shared. He revealed that the initial inspiration for Mermaid came from losing a Microsoft Visio file and having to redraw everything. “On my way home, I thought there had to be a better way. It was also the time when Markdown was gaining momentum. That’s when I came up with the idea of using text as a medium for diagrams.” He further added, “That night, I was in my living room with my kids. They were watching TV, with ‘The Little Mermaid’ playing in the background. That’s how I named the project eight years ago.”
In its early days, Mermaid was primarily used for creating flowcharts. However, as time progressed, Sveidqvist expanded the tool to support other diagram types. The open source community also contributed to its growth, making it a popular and widely-used tool. According to Firestone, Mermaid’s cloud version had over 4 million users last year.
OCV’s approach is to identify popular projects with talented founders and establish a company with them to commercialize these projects. This often involves bringing in a business-oriented CEO to complement the technical co-founder. This strategy is made more effective by the track record these projects have established, de-risking the investment to a significant extent.
Firestone explained, “When you combine open source software with the venture studio model, together with Sid Sijbrandij’s background and the capital, you get seed-stage companies that have been de-risked to a level similar to a Series A. This gives a clear view of the product-market fit, which is a significant advantage for me as I join the team.”
He further added that there is a significant demand for diagramming and flowchart tools among non-technical users. This presents an immense market opportunity for Mermaid Chart, as it aims to build more user-friendly tools for this group. However, the ultimate goal is much bigger, and it’s not about disrupting competitors like Lucidchart or Miro. Mermaid Chart has its sights set on bigger targets like ServiceNow and other workflow automation services, although it may take some time to reach that stage.
Currently, the team is focused on expanding the service and reaching a broader audience. Once a company fully adopts Mermaid Chart, it has the potential to become a crucial knowledge base, paving the way for the company’s wider process automation vision.
Being a text-based tool, there is always going to be a relatively high barrier to entry, which the team recognizes. That’s why they recently introduced a visual editor as an opt-in feature. Users who prefer the text-based approach can continue using it, and they can switch between the two interfaces at will.
To make Mermaid even more accessible, the team trained their own AI model, allowing users to create charts through a chat interface. For paying users, the AI can even fix a diagram if the syntax is incorrect.
“Mermaid’s open-core is popular among millions of software engineers worldwide, and its software is natively supported in platforms like GitLab and GitHub,” said Sijbrandij, co-founder and CEO of GitLab, and founder of Open Core Ventures. “Mermaid Chart is expanding this community by bringing the benefits of Mermaid to all types of business users, using AI as a catalyst. The potential use cases and business opportunities surrounding this technology are significant, and we are excited to support the team in this next phase of growth.”
Correction: After my initial conversation with Mermaid Charts, the team secured additional funding and added further investors. Therefore, we have updated the story to reflect these updates.
