Open source projects continue to stand out as attractive alternatives to proprietary software for those looking for more flexibility or price advantages in the tools they use to work. Today, one of the design juggernauts is announcing some funding. Pen potan open-source platform for designers and developers to collaborate on work in a single environment has raised $12 million, equity that it will use to drive more adoption after reaching 250,000 users this month and 20,000 “stars” on GitHub.
For some context on those numbers, Penpot’s user base exploded last year in the wake of Adobe’s $20 billion acquisition of Figma, growing its user base by 5,600% to 100,000 in a matter of weeks. That momentum is still strong, if not as great: Penpot’s 250,000 users represent 500% user growth today.
“The design battlefield for the next few years is clear and that is who will win over the developers,” Pablo Ruiz-Múzquiz, CEO and co-founder of Penpot, said in an interview this week.
The logic behind Penpot has been to create tools that designers will use and love, but will be equally embraced by their developer counterparts – an audience that design tools have so far failed to capture, let alone build for or target, but is essential to include in the collaboration process earlier than usual. “Developers outnumber designers 10 to 1. So even though Figma has 1 million accounts, those are just designers, meaning they’ve cut out an important audience. Of course we want more designers in the world, but we are getting more and more developers.” Building something that can use both at the same time, he said, “is the big opportunity for Penpot.”
The funding will be used in part to build more tools that can be used in the cloud as well as in self-hosted and on-premises environments; and indeed, the news coincides with Penpot launching several of these out of beta that speak to how it builds with design and coding sensibilities in tandem.
They include a new suite of “Flex Layout” tools for building responsive layouts in CSS; a tool that allows users to tap browser memory to increase collaborative project memory caches up to 16 GB (until now, 2 GB has been an industry standard limit); better code inspection features; more flexibility for adding occasional contributors to a project; and more.
All of these, as with all of Penpot, are completely free to use as the company has not yet introduced any kind of paid features or services. The longer-term questions, therefore, are not only whether Penpot can continue to pick up a critical mass of users of its open source tools, but also whether it can find effective ways to monetize the platform to keep them there.
This latest round is led by Decibel, the VC firm affiliated with Cisco, which is also the startup’s $8 million Series A it announced in September 2022; other existing financiers – including a number of high-profile angels and Athos – also participated.
Ruiz-Múzquiz said this round falls somewhere in the region of “Series A+”: it’s not part of the previous Series A, but it’s a clear precursor to a Series B. Kaleidos – Penpot’s starting parent and actual company name – has doubled its valuation with this round, Ruiz-Múzquiz confirmed, although he does not disclose the actual numbers. One more detail: He said Kaleidos could have raised up to $20 million this time around — a sign of how some of the most popular startups, and those finding a lot of traction, haven’t had the same fundraising problems as some others in the field.
The emergence of Penpot coincides with a number of other developments.
Adobe’s acquisition of the popular design tool Figma sent shockwaves through the design community, with many predicting the deal would spell the end of the product as they know and love it, given Adobe’s larger agenda around selling its own design and marketing tools. At the same time, we’re seeing growing interest in open source alternatives to existing products: in the wake of yet another big chunk of M&A over the past six months – Elon Musk buys Twitter for $44 billion – many users of that platform, which also worried about its future, is trying out alternatives, with Mastodon’s open-source, federated approach currently getting the most attention.
Put those two together and you’ve got a sort of perfect storm for Penpot: For designers and their partners exploring what else is out there beyond Figma, waking up to the potential of open source, here’s a product they can try.
And they did: There are now more than 20,000 teams using the product, including groups at Mozilla, Accenture, ByteDance, IBM, Google, and Microsoft. Runa capital ROSS index notes that it is currently one of the fastest growing open source projects.
Penpot’s pitch is that it’s built a product that’s extremely flexible compared to anything else on the market, and specifically compared to Figma. You can use it as SaaS in the cloud or hosted in your own environment. The platform allows programmers and designers to work on the same tasks simultaneously in real time: a major shift from the way these two groups of users work today, where wireframes are usually put together by designers and only then handed off to coders to review. build those specs. Of course, that entails a lot of time and money as a project develops, the back and forth of managing that process, and any changes that happen along the way.
What’s notable about this fundraiser, and the startup itself, is that it’s building in a pre-Covid-19 way in terms of business models. That is, it doesn’t focus on revenue at all, or even play around with where and how it charges for services or features, and instead keeps the barrier to entry very low by using all of Penpot’s tools for free today.
Ruiz-Múzquiz said this is something his investors have been strongly encouraging at the moment. “Jon [Sakoda, one of the founders at Decibel] told us, “Don’t get distracted by paid corporate positions. That will come. It is more important to create the tool and plugin architecture, which will lead to more value. From that you can deduce what might be cool for companies,” he said.
One of the things that has driven the surge of interest in open source is that a number of investors are poking around the field to add their own “open source” startup to their portfolios. What’s interesting is that Decibel sees Penpot as a place for activity at a time when some of the other work of building digital experiences is being picked up by other technologies.
“Penpot is the first platform that allows designers and developers to work closely together and deliver a great user experience. The momentum is a testament to pent-up demand for tools that seamlessly support each person’s native workflow and enable cross-functional teams to iterate quickly,” said Sudip Chakrabarti, a partner at Decibel, in a statement. “Technologies such as Generative AI unleash tremendous creativity in both designers and developers and we are proud to continue to support Penpot so that the team can take full advantage of this moment.”
