A groundbreaking new report has brought attention to the growing demand for startups creating open source tools and technologies for the rapidly expanding AI revolution. In addition, the adjacent data infrastructure sector is also experiencing a surge in popularity.
Runa Capital, a venture capital firm that relocated its headquarters from Silicon Valley to Luxembourg in 2022, has been releasing the Runa Open Source Startup (ROSS) Index for the past four years. This index shines a light on the fastest-growing commercial open source software (COSS) startups and is updated quarterly, with the most recent annual report covering the entirety of 2022.
Trends
Data and AI are closely intertwined, as AI relies on data for learning and making predictions. This requires a robust infrastructure for managing the collection, storage, and processing of data. These related trends collided in this report.
The top spot on the ROSS Index for last year was taken by LangChain, a San Francisco-based startup founded in 2020. LangChain has developed an open source framework for building apps based on large language models (LLMs). The company’s lead project surpassed 72,500 stars in 2023, and just last month secured a $25 million Series A round led by Sequoia.
Also among the top 10 is Reflex, an open source framework for creating web apps using pure Python. The company recently received a $5 million seed investment. AITable, a spreadsheet-based AI chatbot builder that could be seen as a competitor to open source platform Airtable, is another notable addition. Sismo, a privacy-focused platform that allows users to selectively disclose personal data to applications, is also on the list. HPC-AI, aiming to become the “OpenAI of Southeast Asia,” is creating a distributed AI development and deployment platform. Open source vector database Qdrant secured $28 million in funding to capitalize on the growing AI revolution.
Zooming out to the “top 50 trending” open source startups from last year, it’s clear that more than half (26) are related to AI and data infrastructure.
It’s difficult to directly compare the 2023 index with the previous year’s from a vertical perspective. This is largely due to the fact that businesses often pivot or shift their product focus to align with current trends. With the rise of ChatGPT last year, it’s possible that some earlier-stage startups adjusted their focus or placed greater emphasis on the AI aspect of their product.
However, as 2023 was a breakthrough year for generative AI, it’s no surprise that the demand for open source components skyrocketed. Companies of all sizes are seeking to keep pace with proprietary AI giants like OpenAI, Microsoft, and Google.
Geographies
The open source community has always been globally diverse, with developers from all corners of the world contributing to projects. This ethos often carries over to commercial open source startups, which do not necessarily have a traditional headquarters.
However, the ROSS Index offers a glimpse into the geographical distribution of these startups. Of the 26 companies on the list with a headquarters in the United States, 10 were founded in other countries and still have founders or employees based elsewhere.
In total, the top 50 startups on the list hail from 17 different countries, with 23 being incorporated in Europe. This marks a 20% increase from the previous year. France boasts the most COSS startups with seven, including companies like Sismo and Massa, which are in the top 10. The United Kingdom also saw a significant increase, going from one startup in 2022 to six in 2023 – ranking second from a European perspective.
Other notable statistics from the report include the usage of programming languages. The ROSS Index recorded 12 languages used by the top 50 startups in 2023, compared to 10 in 2022. Typescript, a JavaScript superset developed by Microsoft, remained the most popular language, used by 38% of the top 50 startups. Both Python and Rust saw an increase in popularity, while Go and JavaScript saw a decrease.
The top 50 participants on the ROSS Index gained 12,000 contributors in 2023, and the overall GitHub star count increased by almost 500,000. The report also reveals that funding for the top 50 COSS startups in 2023 totaled $513 million – a 32% increase from 2022 and a 145% increase from 2021.
Methodology & Context
It’s important to examine the methodology behind this report and what factors influence a company’s inclusion in the “top trending” list. Firstly, all companies must have at least 1,000 GitHub stars to be considered. However, the star count alone doesn’t necessarily indicate what is truly trending, as stars accumulate over time. To determine true growth, the Runa Capital team uses an annualized growth rate (AGR) that compares the current star count with the previous corresponding period.
The ROSS Index also involves some manual curation, as the goal is to highlight open source “startups.” Therefore, projects associated with a “product-focused commercial organization” are chosen, with the additional criteria that the company must have been founded less than ten years ago and have received less than $100 million in funding.
The definition of “open source” can also present challenges, as there is a spectrum of how “open source” a company is. Some may be considered “open core,” with most major features locked behind a premium paywall. Others may have more restrictive licenses. Therefore, the ROSS Index simply considers companies to be “open source” if their product is reasonably connected to their open-source repositories. However, this does involve some subjectivity when deciding which companies make the cut.
The ROSS Index adopts a liberal interpretation of what qualifies as open source, including companies like Elastic and MongoDB, who have moved away from traditional open source licenses to protect themselves from being taken advantage of by major cloud providers. According to the ROSS Index’s methodology, both of these companies would still be considered “open source,” despite no longer referring to themselves as such and using licenses that are not formally approved by the Open Source Initiative.
Therefore, the ROSS Index relies on the “commercial perception of open source” rather than the specific license used by the company. This means that commercially-focused licenses like BSL (business source license) and SSPL (server side public license) are also considered in the report.
There are other indexes and lists available for comparing open source projects or companies, including the Open Source Index from Two Sigma Ventures and the GitHub Trending Repositories page. However, the ROSS Index provides a unique perspective on the top trending open source startups specifically.
In Conclusion
Overall, the ROSS Index offers valuable insights into the growing demand for open source tools and technologies, particularly in the AI and data infrastructure sectors. With the rise of generative AI in 2023, it’s clear that there is a strong demand for open source solutions to compete with proprietary giants. The geographical diversity of these startups also highlights the global impact of the open source community.
