Reductive Labs, Moving to Portland, Raises $2M for Open Source IT Automation

Portland, OR, is gaining an interesting new software company—and this one comes with its own venture funding. Reductive Labs, an open-source startup that helps companies automate their IT management, announced today it has raised $2 million in Series A financing led by True Ventures in Palo Alto, CA. True Ventures put in $1.75 million, and private investors pitched in the remaining $250,000. The deal closed earlier this month, according to Reductive Labs co-founder Andrew Shafer.

Reductive Labs is in the process of relocating to Portland. Its founders are currently spread out across the country—Shafer in Salt Lake City, chief executive Luke Kanies in Nashville, and Teyo Tyree in Portland by way of Nashville. Meanwhile, True Ventures is no stranger to the Northwest tech scene. It is an investor in two other Northwest startups—1000 Markets and RescueTime, both in the Seattle area. (Shafer says he’s an avid user of RescueTime’s Web-based time management software.)

To some extent, you need to be a system administrator or IT geek to fully appreciate what Reductive has developed. Its main product, called Puppet, helps businesses automate how they manage their computers and servers in a way that’s cheaper and more efficient than other commercial offerings or ad-hoc, homemade programs. The software lets engineers encode why each computer system is configured in a particular way, and creates a trail to show exactly which systems are running and what has been done to them. This is especially important as the explosion of cloud computing and virtual machines (obtained through Amazon Web Services, say) means a company can now spin up hundreds or thousands of machines at a time—which amounts to a lot of added complexity that can quickly overwhelm IT staff.

Kanies was previously a system administrator, and back in 2003 he formed Reductive as an LLC after having a deep technical conversation with Shafer. “He felt the pain of managing systems and configuring machines,” Shafer says. “Luke wanted to change how people manage machines.” In 2005, they released the first version of Puppet as an open source project, and it was a hit. By the following year, they were profitable. Earlier this year, they incorporated the company and made plans to move its headquarters to Portland.

The reason for the move goes back to 1994, when Shafer and Kanies were roommates at Reed College in Portland. “We just love that city,” Shafer says. “It has a burgeoning technical undercurrent, a strong open source community. We feel we’re well positioned to take advantage of the ecosystem.”

Puppet is free to use, and Reductive Labs sells support for customers if they want it. “We tend to do business with people with very large operations. They’re the ones who really feel a need for this kind of automation,” says Shafer. “We are classic open source—we have service, training, and support contracts.” And they have some very prominent customers: Google (for more than two years), Twitter, … Next Page »

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