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AI and data infrastructure drive demand for open source startups

new report Underscoring the need among startups to build open source tools and technologies for the snowballing AI revolution, adjacent vertical data infrastructure is also heating up.

Runa Capital is a venture capital (VC) firm that will move its headquarters to Luxembourg in 2022 and has published the Runa Open Source Startups (ROSS) Index for the past four years, revealing the fastest growing commercial open source software (COSS) startups. ) Startups. The company publishes quarterly updates, but last year it released its first annual report, taking a top-down look at all of 2022 — something it’s now repeating in 2023.

trend

Data is closely related to AI because AI relies on data for learning and prediction, which requires infrastructure to manage the collection, storage and processing of data. These tangential trends collide in this report.

Last year, LangChain topped the ROSS Index, a two-year-old San Francisco startup that develops an open source framework for building applications based on large language models (LLMs). The company’s main project received 72,500 stars in 2023, and Sequoia Capital last month led a $25 million Series A round of funding for Langlian.

Top 10 COSS startups in the ROSS Index in 2023

Top 10 COSS startups in the ROSS Index in 2023 Image Source: Runner Capital

Rounding out the top 10 are Reflex, an open source framework for creating web applications in pure Python, and the company behind the product recently received $5 million in seed investment; AITable, an artificial intelligence chatbot built on spreadsheets Server, similar to an open source Airtable competitor; Sismo, a privacy-focused platform that allows users to selectively disclose personal data to applications; HPC-AI, which is building a distributed artificial intelligence development and deployment platform and strives to become the OpenAI of Southeast Asia; Open source vector database Qdrant recently raised $28 million to capitalize on the emerging artificial intelligence revolution.

A broader look at last year’s “top 50” open source startups shows that more than half (26) were related to artificial intelligence and data infrastructure.

The top 50 COSS startups in the ROSS Index in 2023

The top 50 COSS startups in the ROSS Index in 2023 Image Source: Runner Capital

It’s difficult to properly compare the 2023 index to the previous year from a vertical perspective, mainly because companies often adjust or change their product positioning to fit today’s hot products. With the hype train going full steam ahead for ChatGPT last year, this may have caused early-stage startups to change their focus or even just put more emphasis on the existing “AI” elements of their products.

But with generative AI having a breakthrough year, it’s easy to see why demand for open source components is likely to skyrocket, as companies of all sizes look to keep up with proprietary AI giants like OpenAI, Microsoft and Google .

geography

Open source software has also always been very fragmented, with developers from all over the world contributing. This ethos often translates into commercial open source startups, which may not have a traditional focus based on a physical headquarters.

However, the ROSS Index takes geography into account to some extent, with the report showing that 26 of the companies on the list are headquartered in the United States, although 10 of them originated elsewhere and still have founders or founders in other regions. staff.

Overall, the top 50 companies come from 17 different countries, with 23 companies registered in Europe – a 20% increase on the previous year’s index. France has the highest number of COSS startups, with 7, with Sismo and Massa both in the top 10, while the UK has surged from 1 startup in 2022 to 6 in 2023. From a European perspective, the ranking second.

Other notable tidbits emerging from the report include programming languages ​​- the ROSS Index recorded 12 languages ​​used in the top 50 last year, compared to just 10 in 2022. But Typescript, a JavaScript superset developed by Microsoft, is still the most popular, with 38% of users among the top 50 startups. Python and Rust are both growing in popularity, while Go and JavaScript are declining.

ROSS Index: Popular Programming Languages

ROSS Index: Trending Programming Languages. Image Source: Runner Capital

In 2023, the top 50 participants in the ROSS Index added a total of 12,000 contributors, while the total number of GitHub stars increased by nearly 500,000. The index also shows that the financing amount of the top 50 COSS startups last year reached US$513 million, an increase of 32% over 2022 and an increase of 145% over 2021.

ROSS Index: Contributors, Stars and Funding

ROSS Index: Contributors, Stars and Funding Image Source: Runner Capital

Methodology and background

It’s worth looking into the methodology behind it all – what factors influence whether a company is considered a “hot trend”?First, all companies are included Must have at least 1,000 GitHub stars (a GitHub metric similar to “likes” in social media) to be considered. However, considering that stars are accumulated over time, the number of stars alone does not tell us what is trending – so a project that has been on GitHub for 10 years may have more accumulation than one that has been around for 10 months more stars. Instead, Runa uses annualized growth rate (AGR) to measure a star’s relative growth over a specific period, looking at how a star’s value now compares to a corresponding previous period to see which growth was the most impressive.

There is also a degree of manual management involved here, as our goal is to exclusively sustain open source “startups” – so the Runa investment team pulls out projects that are part of a “product-focused commercial organization” and it must be less than ten years old Year, known funding was less than $100 million.

Defining what is “open source” also has its inherent challenges, as startups have varying degrees of “open source” – some are more akin to “open core,” where most major features are locked behind a premium paywall, and some have A license that is more restrictive than others. So, for this, Runa’s curators decided that startups must have an “rreasonably connected to its open source repository,” which obviously involves a degree of subjectivity in deciding what content gets eliminated.

There are other nuances at play. The ROSS Index takes a particularly liberal interpretation of “open source” – for example, both Elastic and MongDB have abandoned their open source roots in favor of “available source” licenses to protect themselves from being exploited by major cloud providers. According to the ROSS Index’s methodology, both companies qualify as “open source” – although their licenses are not formally approved by the Open Source Initiative, and these specific example companies no longer call themselves “open source.”

So, in line with Runa’s methodology, it uses what it calls “business perceptions of open source” in its reporting, rather than the actual licenses companies attach to their projects. This means that the restricted source available licenses like the BSL (Business Source License) and SSPL (Server Side Public License) that MongoDB introduced in 2018 as part of its transition from open source are very important for commercial companies of. In terms of ROSS index.

Konstantin Vinogradov, London-based general partner at Runa Capital, explained to TechCrunch: “Such licenses retain the spirit of OSS — all freedom except slightly limited redistribution. This does not impact developers but gives the original vendor a long-term competitive advantage.” “From a venture capital perspective, this is just an evolutionary playbook for the exact same type of company. The open source definition applies to software products, not companies. .”

There are other filters worth noting. For example, companies that focus primarily on providing professional services, or actively support side projects with limited or no commercial elements, are not included in the ROSS Index.

For comparison purposes, there are other indexes and lists that provide a guide to what’s “hot” in the open source space. For example, another venture capital firm called Two Sigma Ventures maintains an open source index that is conceptually similar to Runa’s, except that it covers all forms of open source projects (not just startups) and has additional The filters include the ability to view GitHub’s “watchers” metric, which some believe more accurately reflects a project’s true popularity.

GitHub itself also publishes a trending repository page, which, like Two Sigma Ventures, does not focus on the business behind the project.

As a result, the ROSS Index has become a useful complementary tool for identifying which open source “startups” are particularly worthy of close attention.

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