Thiel alumnus Fossa raises $2.2 million to build open source compliance tool

Open source code can be a nightmare for engineers who are developing software. Fossa, which announced today a seed round of $2.2 million, is launching technology to help companies understand what’s actually in those lines of code, as well as helping them automate open source license compliance and tracking.

The San Francisco-based startup was founded by 22-year-old chief executive Kevin Wang, who is an alumnus of the Thiel Fellowship. “I’m young, but I feel like an old man in software,” Wang told VentureBeat in an interview. After joining TechStars Chicago, Wang began studying computer science at UC Berkeley, but dropped out after a year to work as an engineer at Cloudera. He then joined the Thiel Fellowship in 2013, at which point he founded Fossa.

Fossa addresses the problem of open source license compliance, a topic that has affected some of Silicon Valley’s top tech giants — like Google, which battled a Java lawsuit brought on by Oracle last year.

“Developers don’t really control their code anymore,” said Wang. “About 90 percent of code comes from third parties, so there’s no way of understanding where the code is coming from. And software companies don’t really know what they’re shipping to their customers.”

Wang noticed that many solutions to open source compliance issues are manual auditing services that use Excel spreadsheets to try to source the lines of code, which slows engineers down. Fossa wants to automate this process by offering software tools that continuously track uses of the actual code and the licenses associated with them.

Fossa was created by the team behind TLDRLegal, an open source licensing resource backed by the Open Source Initiative.

The startup announced today the launch of two versions of its product: a free public beta and a business offering it has been testing for the past year with paying customers. These include SolarCity and SmartThings, which was acquired by Samsung in 2014. The fee for businesses is $499 per software repository per month (a repository is a code package or product). “We structure it so that a company with three products pays for three licenses of Fossa, but there are edge cases,” said Wang. “So far, that has addressed enterprise needs.”

Fossa has partnered with organizations like npm and the Linux Foundation to develop custom integrations and channels.

Today’s seed round was led by Bain Capital. Numerous angel investors, including Salesforce chairman and CEO Marc Benioff, YouTube cofounder and CTO Steve Chen, Skype cofounder and CTO Jaan Tallinn, Cloudera cofounder and CTO Amr Awadallah, and Tinder cofounder and CMO Justin Mateen, also joined.

The new capital will be used to further develop the software and expand distribution. There are just under 10 employees working at Fossa.