Queensland quiet software giant Octopus Deploy snaps up US rival for $43 million

- February 27, 2024 3 MIN READ
Octopus Deploy, Sonia and Paul Stovell.
Octopus Deploy cofounders Sonia and Paul Stovell. Photo: Octopus Deploy
Brisbane enterprise software scaleup Octopus Deploy has acquired a US rival, Codefresh, in a deal worth reportedly worth US$28 million (A$42.6m).

It’s the first major acquisition by the quiet achiever of the Queensland tech scene, one of the largest privately-held companies in the DevOps ecosystem.

While no figure was mentioned in the announcement, media reports have put a US$28 million price tag on the M&A deal, which would represent a haircut for Codefresh’s backers, who include Microsoft’s Venture Fund M12 and Alicorn Venture Partners, Red Dot Capital and Shasta Ventures, raising US$42 million all up, including $27m in 2020.

Octopus Deploy, which has more than 4000 customers globally with platform engineering teams using it for continuous integration/delivery (CI/CD), had bootstrapped for a decade before raising US$172.5 million (A$222m) from New York VC Insight Partners in 2021, nudging the business towards unicorn (worth $1bn) status with a A$750 million valuation.

The company has more than 270 employees globally, with annual revenue topping US$50 million (A$77m), and has been profitable for 10 of the past 11 years. Codefresh will bring an additional US$10m in revenue to the table.

San Francisco-based Codefresh, founded in 2014 by Oleg Verhovsky and Raziel Tabib, specialises in Argo workflows for Kubernetes CD, GitOps, and CI and is an active contributor and maintainer of Argo.

Octopus Deploy founder and CEO Paul Stovell said the acquisition strengthens the company’s support for Kubernetes and ambitions to deliver the most powerful best-of-breed CD platform for virtual machines and cloud-native enterprise-scale applications.

“We’re adding Codefresh’s considerable technology to empower software teams to deploy freely,” he said.

“It represents a big investment in open source and the Argo project that Codefresh maintains and scales with its enterprise offering”.

Codefresh CEO Raziel Tabib said the combined businesses will offer unparalleled benefits for software teams, including advanced CD, deployment automation, release orchestration, environment progression, observability, and enterprise compliance across all workloads.

“We are eager to bring the power of Codefresh’s Continuous Integration and cloud-native GitOps – based on Argo – to Octopus Deploy,” he said.

“With Codefresh and Octopus, we will elevate the capabilities available to software teams and drive innovation in Continuous Delivery.”

His co-founder and Codefresh’s chief open source officer Dan Garfield said: “We’re going to be able to invest even more in open source and continue to grow Argo and other open-source initiatives with our community partners.”

Stovell revealed in a blog post about the deal that he’d “explored a bunch [of M&A deals] over the years” that “start excellent on paper but always fall down at the human level”. 

He was in Chicago for KubeCon last year with his team demonstrating how Octopus can help Kubernetes users – something the company has been involved in since 2018. He walked past the Codefresh booth, recognised Tabib from his LinkedIn photo, and started a conversation.

“It’s always fascinating to meet other founders in our space, and Raziel and I had never met before, so agreed to get a coffee,” he said.

“At that first coffee, it was clear Raziel and I shared the same vision for the industry and our customers’ challenges. It was as if we’d been walking parallel but similar journeys.”

The fit came with the Codefresh team of around 50, who were embraced by Stovell’s people.

“What really brought it together was when other Octonauts met other Codefreshers as we further explored the idea of acquisition,” he said.

“The overwhelming reaction from Octonauts was, ‘we’d absolutely hire that person; they’d make a great Octonaut’.”

Both businesses have been on a similar path for a similar amount of time, Stovell said and “bringing both groups together to compare notes and continue to push the state of the art in CD is very exciting”.