Stack Overflow is well-known for its public developer community that allows technologists to share coding knowledge and build their networks, but this time it’s betting on the popularity of a newer, private product – Stack Overflow for Teams. Rolled out in 2018, Stack Overflow for Teams acts as a communication tool and internal repository for sensitive company knowledge like proprietary code. Due to the shift towards remote work, The Teams solution has gathered much attention because it connects distributed employees to a central source of knowledge in a secure way. Stack Overflow believes that the Teams solution will account for approximately one-third of its total revenue in 2020, and the ARR for this product is projected to reach $27M this year. The solution is currently used by companies like Microsoft and Bloomberg.
AlleyWatch caught up with CEO Prashanth Chandrasekar to discuss the increased focus on the SaaS offering, the company’s roadmap, and recent round of funding, which brings the total funding raised to $153M across five rounds.
Who were your investors and how much did you raise?
We raised $85M in Series E funding. The round was led by GIC with participation from new investor Silver Lake Waterman and existing investors Andreessen Horowitz, Index Ventures, Spark Capital, and Union Square Ventures (USV).
Tell us about the product or service that Stack Overflow offers.
Stack Overflow helps developers and technologists write the script of the future. Our free public platform includes ~175 websites that cover various software and programming topics including full-stack engineering, cloud, DevOps, AI / ML, etc. Our paid products include the leading asynchronous SaaS collaboration and knowledge sharing offering, Stack Overflow for Teams, in addition to Stack Overflow Advertising and Stack Overflow Talent. We partner with top companies such as Bloomberg, Microsoft, Wix, Expensify, Zapier, and more to help them enable, understand, hire, and engage the world’s developers and technologists.
What inspired the start of Stack Overflow?
Coders were in need of a communal space to share ideas and help each other. At the time of our founding, in 2008, people had to rely on textbooks and websites that were paywalled; Stack Overflow democratized developer and technologists’ knowledge.
How is Stack Overflow different?
Our public platform and ecosystem of websites serves 120 million visitors every month, making it one of the 50 most popular websites in the world. With our asynchronous collaboration and knowledge sharing SaaS offering Stack Overflow for Teams, we’re transforming how people work within organizations by providing developers and technologists a private and highly efficient way for them to discover and share evergreen answers to their most pressing questions. The Private Teams solution uses the much loved and familiar format of our public Stack Overflow websites and saves developers and technologists time, allows them to get answers/information quickly, and be more productive in their roles.
What market does Stack Overflow target and how big is it?
Stack Overflow’s public platform is used by nearly everyone in software engineering, DevOps, cloud operations and information technology. Users come to learn, share their knowledge, collaborate, and build their careers. As the world becomes more technology-led and companies accelerate their digital transformations, exacerbated by COVID-19, companies will spend even more of their resources in moving to the cloud, building information systems rooted in massive data sets and generating deep insight about their business and customers using machine learning – all enabled by developers and technologists. Stack Overflow has recognized this tectonic shift and created leading knowledge-sharing and collaboration products to assist developers and technologists. Our products enable them to move faster and rapidly build the next generation of software applications using the most relevant and accurate technical knowledge.
How has COVID-19 impacted the business?
For many companies, when the option is available, remote work has become the norm. In this environment, we have seen a surge in demand for our SaaS collaboration product Stack Overflow for Teams. For example, our Basic Trials for Stack Overflow for Teams have increased 10X since 2019. Employees across Engineering, Product Management, Data Science, and even Customer Success organizations need a way to ship products faster, accelerate onboarding, improve customer experience, and drive innovation by communicating and collaborating asynchronously, no matter where in the world they are working from.
What was the funding process like?
We were fortunate to have significant investor interest before the pandemic, and through the pandemic as our Teams product continued to see record growth, so the process was quite organic.
What are the biggest challenges that you faced while raising capital?
The biggest challenge was the significant number of Zoom meetings as it relates to all stages of the fundraising process – from the initial pitches to the detailed diligence process. A related point is that pre-pandemic, many VCs would have never considered making investments without meeting the full team in person, coming to the offices, etc. However, we were able to replicate the experience with many, many Zoom meetings.
What factors about your business led your investors to write the check?
Investors were excited at the prospect of supporting one of the most trusted and visited websites on the internet and a highly impactful company in the developer and technologist ecosystem, that is about to embark on a significant high growth journey. With our public platform, in addition to the suite of products we’ve developed, investors saw the unique opportunity Stack Overflow has to help grow and support companies as they shift to digital models.
Investors were excited at the prospect of supporting one of the most trusted and visited websites on the internet and a highly impactful company in the developer and technologist ecosystem
What are the milestones you plan to achieve in the next six months?
We’ll be focused on scaling the company rapidly, accelerating our transformation into a leading SaaS company, expanding into new markets, and furthering our investment in our public platform and the community – the foundation of our company.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Spend very responsibility, focus your resources on the most important initiatives, make timely cash management decisions and engage in thorough planning. Given the COVID-19 pandemic, there are many uncertainties and scenario planning is more important than ever.
Where do you see the company going now over the near term?
We launched an exciting feature for Teams called Articles this month that allows for longer-form content in addition to Q&A. Look for more product announcements and deeper integrations with our great partners like Slack.
What’s your favorite outdoor dining restaurant in NYC
I’m actually currently based in San Antonio, Texas while the company is 100% remote through the end of the year. I do miss the NYC dining experience!