Sequoia Capital will continue funding three open source software developers every year, as it did last year.
Last May, Silicon Valley venture capital company Sequoia unveiled the Sequoia Open Source Fellowship, which was initially invite-only and highlighted one recipient. Developers may apply for a stipend of up to a year to work full-time on the project without giving up stock or control, according to Sequoia.
Underfunding
Open source software has a chronic underfunding issue, but it only becomes popular when a huge security hole like Log4Shell wrecks the software supply chain.
Volunteer contributors regularly produce some of the world’s most popular apps, juggling their open-source “passion projects” with paid labor. The world is comfortable with this system until something goes wrong, at which time governments scurry with executive orders and legislation to strengthen the software supply chain.
Such rules have led Big Tech to work on new financing efforts to help developers behind some of the most crucial open source software components, while Spotify, Salesforce, and Bloomberg have started their own grant programs.
However, these financial programs are not altruistic. The companies providing capital usually identify the open source software they use most and allocate funds accordingly to protect their business and build favor with a community they need and may want to hire in the future.
A little back
How does this relate to venture capital? Why would Sequoia sponsor software engineers with no return? As with other such funds, Sequoia may not return its funding immediately, but it benefits in other ways as a “big picture” investment.
Sequoia has invested in MongoDB (a $34 billion database giant that abandoned its open source roots) and Confluent, the company behind Apache Kafka, to give you an idea of its approach to this play.
Sequoia partner Bogomil Balkansky emailed Eltrys, “Open source really has become the lifeblood of software these days—when you look under the covers even of proprietary software today, it is very dependent on open-source libraries and packages.” Open source is what the world and computer systems run on today.”
Sequoia recently financed PartyKit, which builds real-time multiplayer infrastructure for any app, and Temporal, a microservices orchestration platform. Though not open source, Sequoia invested in Coana, which helps firms prioritize vulnerabilities in their open source software stack.
One investment illuminates Sequoia’s new fellowship’s goal. Pydantic, a company sponsored by Sequoia last year, aims to commercialize the Python library and open-source data-validation framework utilized by Alphabet, Amazon, Apple, Meta, and Microsoft.
Pydantic uses FastAPI, an open-source API framework, which is fascinating. Sebastian Ramírez Montaño, a Colombian software engineer from Berlin and Sequoia’s first and only Fellowship winner, founded FastAPI last year.
This shows that some open source initiatives are Lego bricks that are significant but hard to sell, while others are ideal commercialization candidates.
“The open source world is to some extent divided between projects that can be commercialized and projects that are very important and influential but can’t become companies,” Balkansky added. “We at Sequoia have a long history of partnering with founders and creators who can build great companies, and we will continue to do so.”
Sequoia is making two financial commitments to two separate types of open source businesses, utilizing grants to fund foundational projects that may be crucial to one of the firms it’s investing in directly.
“In order for Sequoia and our portfolio of companies to succeed, there is this vital category of open source developer work that must be supported in order for the whole ecosystem to work well,” Balkansky said.
Starting today, Sequoia will examine proposals from “any developer” working on an open source project on a “rolling basis.” The developer may work on the idea without worrying about food since living costs will be provided monthly for up to a year.
According to Sequoia partner Lauren Reeder, “We want to support open source creators and the projects that have real-world adoption.” Many developers are juggling their OSS projects with full-time or numerous part-time jobs. We want to finance the most important things.”
