Puppet Labs Lands $40 Million Funding Round, Says It's On Track To Be Profitable

Puppet Labs has closed a $40 million Series E funding round and plans to use it to hire more staff around the world, the Portland, Ore.-based IT automation software vendor said Thursday.

Puppet Labs, founded in 2005, sells a commercial version of the Puppet open source software, which automates time-consuming data center tasks and replaces the manual scripting that has long been the bane of the server admin's existence.

In a blog post Thursday, Luke Kanies, founder and CEO of Puppet Labs, said the company's software now is used by a wide range of organizations, from early-stage startups to "massive data centers" at Google and CERN.

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"Puppet is managing more and more of the data center -- including network infrastructure -- and we’re already seeing Puppet at work in the Internet of Things," Kanies said in the blog post. "It’s only going to expand from there."

Since 2009, Puppet Labs has raised a total of $86 million from investors VMware, Cisco, Google Ventures, Kleiner Perkins Caufield & Byers, Triangle Peak Partners and True Ventures.

More than $30 million of that funding comes from VMware, which uses Puppet to handle IT automation in private clouds and its vCloud Hybrid Service public clouds.

Like many startups in the tech boom, Puppet Labs needs to find and hire new talent in order to grow, and that’s part of what the vendor is planning to do with the new funding. It currently has roughly 300 employees.

Puppet Labs has hired Mukesh Sharma, former COO of cloud service provider Canopy, as vice president of sales for the EMEA region, to help with the international expansion.

Puppet Labs also is moving to a new headquarters in Portland that's twice as large as its current space, Kanies said in the blog post.

Puppet is seen as a linchpin for Devops, a set of processes for collaboration between software developers and IT operations teams that has been making steady inroads in enterprises.

By getting developers and IT staff on the same page, Devops is seen as a key enabler for large-scale cloud environments. It's ideal for companies "that need to double the size of their production environment without doubling the size of their team," Kanies told CRN last September.

What's next for Puppet Labs? CFO Bill Koefoed, former head of investor relations at Microsoft, told the Portland Business Journalthe vendor is on track to start turning a profit in "a couple of years," and he didn't rule out an IPO.

PUBLISHED JUNE 19, 2014