AI and data infrastructure drive demand for open source startups.

A new report The snowballing highlights the demand for startups building open-source tools and technologies for the AI ​​revolution, with the adjacent data infrastructure vertical also heating up.

Rona Capital, the venture capital (VC) firm that upped the ante from Silicon Valley and moved its headquarters to Luxembourg in 2022, has published the Rona Open Source Startup (ROSS) Index for the past four years, which ranks fast-growing startups. Highlighting the one. Commercial Open Source Software (COSS) startups. The company publishes quarterly updates, but last year it released its first annual report with a top-down view of the whole of 2022 – which is now being repeated for 2023.

Trends

Data is closely linked to AI because AI relies on data to learn and make predictions, and it requires infrastructure to manage the collection, storage, and processing of that data. And these tangential trends collide in this report.

Topping the ROSS index for the past year was LangChain, a two-year-old San Francisco-based startup that has developed an open-source framework for building apps based on large language models (LLMs). With the company’s main project set to pass 72,500 stars in 2023, Sequoia led a $25 million Series A round in LangChain just last month.

Elsewhere in the top 10 is Reflex, an open-source framework for building web apps in pure Python, the product behind which the company recently received $5 million in seed investment. AITable, a spreadsheet-based AI chatbot builder and somewhat similar to the open-source Airtable competitor. Sismo, a privacy-focused platform that allows users to selectively reveal personal data to applications. HPC-AI, which is building a distributed AI development and deployment platform to become something like Southeast Asia’s OpenAI. and open-source vector database Qdrant, which recently raised $28 million to capitalize on the growing AI revolution.

A broad look at last year’s “Top 50 Trending” open source startups shows that more than half (26) are related to AI and data infrastructure.

From a vertical perspective it is difficult to adequately compare the 2023 index with last year, largely because businesses often pivot or change their product positioning to what is hot today. With the ChatGPT hype train in full throttle last year, this may force early-stage startups to change their focus, or even put more emphasis on the existing “AI” element of their product. can

But as creative AI advances year after year, it’s easy to see why demand for open-source components could grow, as companies of all sizes keep pace with proprietary AI juggernauts like OpenAI, Microsoft and Google. want

Geography

Open source software has also always been highly distributed, with developers from all over the world contributing. This ethos often translates into commercial open-source startups whose traditional center of gravity may not be anchored by brick-and-mortar headquarters.

However, the ROSS Index goes some way toward bringing geography into the picture, reporting that 26 of the companies on the list are headquartered in the U.S., although 10 of those companies originated elsewhere and are still listed. The founders or employees are residing in other places.

In total, the top 50 belonged to 17 different countries, with 23 companies in Europe – a 20 percent increase on last year’s index. France accounted for the most COSS startups with seven, including Sismo and Massa in the top 10, while the UK grew from just one startup in 2022 to six in 2023, making it second from a European perspective. kept on

Other notable takeaways from the report include programming languages ​​– the ROSS index recorded 12 languages ​​used by the top 50 last year, compared to 10 in 2022. Among the top 50 startups. With the decline of Go and JavaScript, both Python and Rust rose in popularity.

The top 50 contributors to the ROSS index collectively gained 12,000 contributors in 2023, while the overall number of GitHub stars increased by nearly 500,000. The index also shows that funding among COSS’s top 50 startups reached $513 million last year, an increase of 32% in 2022 and 145% in 2021.

Methodology and context

It’s worth looking at the mechanism behind all of this – what factors influence whether a company is considered “top trending”? For starters, all companies are involved. Must have at least 1,000 GitHub stars (a GitHub metric similar to “likes” in social media) to be considered. But star counts alone don’t tell us much about what’s trending, because stars accumulate over time – so a project that’s been on GitHub for 10 years has one that’s been on GitHub for 10 months. More stars are likely to be collected. Instead, RONA measures the relative growth of stars over a given period using the annual growth rate (AGR) – it looks at the value of stars now compared to the previous same period to see how all What is the most impressive increase?

There’s also a degree of manual curation involved, given that the goal is specifically to weed out open-source “startups” — so the Rona Investments team picks out projects that belong to “product-focused commercial organizations,” and It has to be done. Founded less than ten years ago with less than $100 million in known funding.

Defining “open source” has its own inherent challenges, as there is a spectrum of how “open source” a startup is – some more akin to “open core”, where most of their large Features are locked behind the premium. paywall, and some have licenses that are more restrictive than others. So for this, Rona’s curators decided that the startup should have only one product that is “reasily linked to its open source repositories,” which obviously involves a degree of subjectivity when deciding which makes the cut.

There are more nuances in the game. The ROSS index adopts a particularly liberal interpretation of “open source” – for example, both Elastic and MongoDB have licensed their open source software to protect themselves from being exploited by large cloud providers. Abandoned source routes. According to the ROSS Index methodology, both of these companies would qualify as “open source” – even though their licenses have not been formally approved by the Open Source Initiative, and these particular exemplary companies now consider themselves Do not refer to it as “open source”.

Thus, in line with Rona’s methodology, it uses what it calls an “open-source commercial concept” for its report, rather than the actual license attached to its project from the company. This means that limited-source licenses such as the BSL (Business Source License) and SSPL (Server-Side Public License), which MongoDB introduced in 2018 as part of its transition away from open source, are available to commercial companies. I have too many. There is concern in the ROSS index.

“Such licenses preserve the spirit of OSS – all its freedoms, except for slightly restricted redistribution, which does not affect developers but gives original vendors a long-term competitive advantage,” Konstantin Vinogradov, RONA Capital’s London-based general partner, explained to TechCrunch. “From a VC perspective, it’s a ready-made playbook for exactly those types of companies. The definition of open source applies to software products, not companies.

There are other notable filters in place. For example, companies that focus mostly on providing professional services, or with limited functional support without a side project or commercial element, are not included in the ROSS index.

For comparative purposes, there are other indexes and lists that push “what’s hot” in the open source landscape. Another VC firm called Two Sigma Ventures maintains an open source index, for example, which is similar in concept to Rona, except that it covers all types of open source projects (not just startups). and includes additional filters, including the ability to view By GitHub’s “watchers” metric, which some say gives a more accurate picture of a project’s true popularity.

GitHub itself also publishes a Trending Repositories page, which, like Two Sigma Ventures, doesn’t focus on the business behind the project.

So the ROSS Index has emerged as a useful complementary tool for figuring out which open source “startups” are particularly worth keeping tabs on.