NanoVMs

NanoVMs

Early Stage

Upending 50 years of operating system hegemony

Upending 50 years of operating system hegemony

Overview

Raised this Round: Raised: $962,095

Total Commitments ($USD)

Platform

Republic

Start Date

04/23/2020

Close Date

08/15/2020

Min. Goal
$25,000
Max. Goal
$1,070,000
Min. Investment

$100

Security Type

SAFE

Series

Seed

SEC Filing Type

RegCF    Open SEC Filing

Valuation Cap

$12,000,000

Discount

10%

Year Founded

2015

Industry

Security, Cybersecurity, & Defense

Tech Sector

EnterpriseTech

Distribution Model

B2B

Margin

High

Capital Intensity

Low

Location

San Fransisco, California

Business Type

High Growth

NanoVMs, with a valuation cap of $12 million, is raising funds on Republic. The company is a unikernel platform that is building a new operating system to run Linux apps faster and safer. NanoVMs allows users to build, control, and run unikernels and prevent hackers from violating the data of organizations. NanoVMs was founded by Ian Eyberg in August 2015 and has raised over $1.5 million since its founding. The current round of crowdfunding of the company has a minimum goal of $25,000 and a maximum goal of $1,070,000, and the funds will be used towards the growth of paid partnerships and sales and marketing efforts. NanoVMs has received initial revenue from Air Force and has done paid trials with companies like Amgen.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$32,100

$0

COGS

$0

$0

Tax

$0

$0

 

 

Net Income

$-740,029

$-755,238

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$24,729

$671,840

Accounts Receivable

$0

$0

Total Assets

$52,593

$718,615

Short-Term Debt

$65,377

$242

Long-Term Debt

$0

$0

Total Liabilities

$65,377

$242

Financials as of: 04/23/2020
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Raise History

Offering Name Close Date Platform Valuation/Cap Total Raised Security Type Status Reg Type
NanoVMs 04/18/2023 Dealmaker Securities $25,000,000 $231,398 SAFE Funded RegCF
NanoVMs 03/23/2022 StartEngine $20,000,000 $376,314 Convertible Note Funded RegCF
NanoVMs 08/14/2020 Republic $12,000,000 $962,095 SAFE Funded RegCF
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Revenue History

Note: Revenue data points reflect the latest of either the most recent fiscal year's financials, or updated revenues directly from the founder, at each raise's close date.

Valuation History

Price per Share History

Note: Share prices shown in earlier rounds may not be indicative of any stock splits.

Employee History

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Summary

The NanoVMs team has been selected as a “Deal to Watch” by KingsCrowd. This distinction is reserved for deals selected into the top 10%-20% of our due diligence funnel. If you have questions regarding our deal diligence and selection methodology, please reach out to hello@kingscrowd.com.

Next Section: Problem

Problem

When data volumes exploded during the Internet era, the previous paradigm of separate servers became prohibitively resource-intensive. The new paradigm that took hold was called virtualization: running multiple computing systems within a single physical machine. 

 

The virtualization trend started with the rise of companies such as VMware in the early 2000s, which deployed virtual machines: multiple de facto computers, each with their own operating system, running in parallel on a single physical server. The streamlining of computing continued in the 2010s with the next wave of virtualization: containers. As popularized by vendors such as Docker, containers are multiple programs within a compartmentalized unit that functions independently of other units – except that all units share a common operating system. 

 

Virtualization has enabled enterprises to support considerable computing capacity with relatively modest footprints of physical servers. 

 

But it has given rise to another, more sinister development: security breaches. Major security breaches now commonly result in hundreds of millions of user credentials being exposed. The largest cyber attacks have now resulted in damages measured in the billions. Attacks are costly for small companies too, and regularly lead to business failure

 

Although attacks have become so frequent that it’s easy to regard them as inevitable, security experts point out that breaches of security are a consequence of the data management practices that enterprises choose to adopt. This hints at the inherent vulnerability of virtualized data structures such as virtual machines or containers. After all, enabling enterprises to run more applications, users, and virtual systems from any given physical server was the point of virtualization in the first place! But the ability of virtualized structures to accommodate multiple users and programs also engenders the possibility that some of those users and/or programs will be malicious.

Next Section: Solution

Solution

NanoVMs is a promising investment opportunity because it’s the first company to market with a compelling commercial unikernel offering.

 

Just as the single-use physical servers of the 1960s gave way to virtual machines and eventually containers, some computing experts believe that unikernels are the next generation of computing technology.

 

The goal of unikernels is to enable enterprises to achieve the streamlining benefits of virtualization – but in a way that drastically reduces opportunities for breaches. Unlike containers that house and execute multiple applications while relying on an operating system that’s shared with adjacent containers, unikernels only hold two key components: a single application and an operating system purpose-built to run that solitary app.

 

The ultra-streamlined profile of unikernels counteracts the security vulnerabilities inherent in traditional VMs or containers. It’s difficult to hijack a unikernel’s operating system because it’s a lightweight OS designed to do one thing only: run the app that the unikernel holds. It’s quite literally impossible for malicious users to log into a unikernel and hijack its functions because unikernels don’t have ANY users (much less multiple users, as would be the case in typical container architecture).

 

NanoVMs is making unikernels available and easy to use for its customers. Their solution allows enterprises to run their existing applications in a secure unikernel structure without needing any porting or source code changes. NanoVM’s tooling is equally well-suited to deploying client applications in unikernel structures via public cloud platforms (such as AWS, Google Cloud, or Azure), or in private cloud environments.

 

The NanoVMs team wants their solution to be a truly “production-ready” product for their customers. To that end, they’ve integrated a wide range of features, including audit logging, backup and restore functions, utilization reporting, and continuous integration and delivery. NanoVMs is at the forefront of making unikernels the next major cloud technology.

Next Section: Other

The Team

NanoVMs is led by CEO Ian Eyberg, who founded the company in 2015. Prior to launching the venture, he accumulated a decade of experience as a software engineer – establishing a track record of building complex data systems from scratch, in both large enterprises and startup environments. Eyberg manages a small team of equally experienced engineers who execute the company’s customer engagements.

The company also benefits from guidance provided by advisors such as Henrik Rosendahl (a seasoned entrepreneur and virtualization expert who had two exits to VMware) and from its strong bench of institutional investors (including several highly respected venture funds, as well as Alchemist – arguably the most prestigious accelerator exclusively for enterprise-focused startups).

Next Section: Other

Growth Plan

NanoVMs has made the strategic decision to prioritize its enterprise sales efforts in five key sectors all of which have the need to secure sensitive data. These sectors are energy, healthcare, finance, telecom, and government.

 

The company projects that it should be able to attain annual revenues of $3M within three years. Considering the massive amounts of data handled by the five sectors that the company is targeting (and the correspondingly gargantuan amounts of IT spend in each), if NanoVMs manages to gain even a small foothold in any one of the sectors, then its $3M annual revenue forecast should, in hindsight, prove to have been an extremely conservative estimate.

Next Section: Why We Like it

Why We Like it

A Unikernels Expert at the Helm: It’s generally a positive sign when startup founders have some degree of technical background in their chosen vertical. In the case of NanoVMs, the founder alignment is even stronger. Chief executive Ian Eyberg is legitimately a subject matter expert in unikernels. He holds multiple patents in the field. Dating back to at least 2016, he has been a constant evangelist for unikernels as a next-generation approach to virtualization, raising awareness through such channels as conference presentations, trade show appearances, and magazine articles.

 

Value that’s Already Resonating with Major Clients: NanoVMs has already landed two fixed-price pilots with top-tier clients: Amgen and the US Air Force. The purchasing firepower of these two early customers is enormous. Amgen is a Fortune 500 pharma company with a market cap of $130B while the US Air Force budget is around $150B. If either or both of NanoVMs’ pilots are successful, these customers could easily upscale to dramatically increased contract sizes.

 

A Potentially Enormous Market: If one accepts the proposition that unikernels are the logical successor to VMs and containers, then the implied market for NanoVMs is mind-bogglingly large. Even just the public cloud segment of NanoVM’s addressable market is already an estimated tens of billions of dollars, with strong projected annual growth… And the private cloud segment is believed to be even larger. 

 

It’s telling that the two companies widely considered to have catalyzed prior waves of virtualization have already attained lofty enterprise values: VMware (known as the company that popularized virtual machines) is a publicly traded company with a market cap over $50B. Docker (the startup that launched the container boom) raised capital at valuations exceeding $1B. If NanoVMs capitalizes on its first-mover advantage and attains dominant share of the unikernel market just as unikernels emerge as the new industry standard for virtualization, then it’s plausible that NanoVMs could attain a similarly spectacular valuation.

Next Section: Rating

Rating

It’s tough to say with any certainty whether unikernels will live up to their hype. The tech sector is littered with examples of new technologies that were touted as the “Next Big Thing,” but ultimately faded into obscurity or irrelevance.

 

Having said that: there is an abundance of cybersecurity experts, computer scientists, and IT industry professionals who recognize the potential of unikernels. 

 

If unikernels DO usher in a revolution in how enterprises perform their computing activities, NanoVMs looks like the company to beat. It’s a nimble startup staffed by infrastructure engineers and led by a true unikernel evangelist. This company eats, sleeps, and breathes unikernels. They have received funding from top-tier VCs and secured paid pilots with two enterprises that share the trait of being well-resourced and capable of signing much larger contracts.

 

NanoVMs has done well to seize the emerging market opportunity in unikernels by beating much larger cloud infrastructure providers to market and thereby gaining first-mover advantage. If it can retain that competitive edge – and if unikernels are in fact the logical next step in the march to virtualization that started twenty years ago – then NanoVMs could become immensely valuable and a deeply impactful company.

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NanoVMs on Republic
Platform: Republic
Security Type: SAFE
Valuation: $12,000,000

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