Security firm Chainguard has raised $280 million in non-dilutive financing from General Catalyst to accelerate customer acquisition amid rising demand for secure open-source software, the company told Reuters.
The financing comes from General Catalyst’s Customer Value Fund (CVF), a vehicle designed to fund sales and marketing expenses for growth-stage companies. The deal comes months after Chainguard raised $356 million in a Series D equity round at a valuation of $3.5 billion.
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The Kirkland, Washington-based company will use the capital to specifically fund its go-to-market operations in the U.S. and across Europe and Asia, including expanding its sales and marketing teams, which already have more than 100 people. The company has forecast more than $100 million in annual recurring revenue for 2025, serving enterprises such as Snowflake (SNOW.N), opens new tab and Snap (SNAP.N), opens new tab.
Dan Lorenc, CEO and co-founder of Chainguard, said the demand for the firm’s services has surged as the artificial intelligence boom accelerates the creation and adoption of new open-source software within major companies.
“It allows us to preserve the capital from our equity raise and be more aggressive in R&D,” Lorenc said. “AI is shortening the time from an open-source project’s creation to its adoption inside major regulated companies. There are new AI apps that were first published three months ago that banks and Fortune 100 companies are trying to run.”
The financing is a novel vehicle where repayment is tied to the revenue generated from the customers acquired using the funds. This flexible structure will allow Chainguard to draw down capital quarterly based on its growth needs, and the repayment speed is also linked to Chainguard’s margins.
Better margins will lead to a faster payoff and lower overall interest payments.
General Catalyst said Chainguard’s proven ability to acquire customers efficiently made it an ideal fit for the fund.
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