Before the recent financial crash, we wrote about growing investment around the programming framework Ruby on Rails. It looks those investments haven’t stopped yet — New Relic, a company that helps you manage Rails applications, has raised $6 million in a second round of funding.
Dan Scholnick of Trinity Ventures, which led the round, says there are a bunch of reasons why New Relic seemed like a good investment, even as the economy crumbles. For one thing, interest in Rails (which gives developers speed and flexibility when building apps) continues to grow. The framework is even being used by big, established companies, Scholnick says. And New Relic’s team makes it particularly well-suited to take advantage of this trend — in Scholnick’s words, it’s like someone called “central casting” to build this kind of company. Most significantly, founder Lewis Cirne previously led Wily Technology, which managed Java apps, back in 1998, taking it through the dot-com bust to annual revenues of $100 million when it was acquired by CA two years ago.
New Relic’s product is a plugin called RPM that provides developers with diagnostic tools to help them find and fix problems with their code. The San Francisco company has been growing pretty quickly — since launching in May, it has added an average of 170 new customers per month, for a total of 850. Those customers include photo service Getty Images, faux-punk rock retailer Hot Topic and 37Signals, whose online business and collaboration tools are used by VentureBeat. In addition to those paying customers, 1,400 users have signed up for New Relic’s free service, RPM Lite.
This funding comes only six months after New Relic announced its $3.5 million first round, but Cirne says the company wasn’t running out of cash. Instead, the new venture dollars will help New Relic take advantage of new product opportunities at “the higher end” of the Rails management market. Benchmark Capital, which led New Relic’s first round, also participated in this funding.
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