In April 2020, tech company Zeit announced a major rebranding. This new turn allowed Guillermo Rauch to return to big business, but at the same time, it became the most controversial decision in the eyes of the community.
Nonetheless, this decision had objective reasons. Zeit could be labeled a failure in terms of investments — essentially, it was not perceived as a startup and that was the main problem. Some of the investors in the future company Vercel — CRV — said they were “delighted to resume business with Guillermo, after he returned to the path of entrepreneurship and founded Vercel”.
The decision, so critically perceived by the community, turned out to be extremely effective for attracting investors. Immediately after the rebranding, now the company Vercel, announced the collection of $21 million. Soon the company received another $40 million, then $102 million — then Vercel was valued at $1.1 billion, becoming Guillermo’s first unicorn.
In this, the final part of the series, we will talk about the extreme, the most important, and successful project of Guillermo — the company Vercel.
Rebranding
First, it’s worth dwelling on what the company zeit represented. And to describe this is quite difficult — speaking Zeit implied directly the company itself, and often spoke about Zeit Now — for example, in one interview Guillermo was asked a question, starting with “Your products zeit and zeit now”.
The new company was supposed to unify these products. And today, saying “Vercel”, implies both the concept of Zeit and Zeit Now. “Our product consists of two parts: NextJS and a platform distributed around the world, and the business is based on the scalability of this platform” — Guillermo Rauch.
The decision to rebrand caused a surge of emotions in the community — a lot of negative comments, requests to return everything back and/or not to sell the company (it is difficult to understand why many considered this rebranding a sale).
In addition to this, there are more interesting reasons for the rebranding. So, Guillermo noted that the old name sounded differently in different languages and not everywhere it was easy to write what was heard — “The new name was analyzed in five languages by five linguists from different languages of the world”.
The new name — Vercel — was devised by the company Lexicon. According to them: “Zeit needed a name that would reflect the efficiency, superiority, and power of their platform. They also needed the name to be short, spread worldwide, and easy for developers to type command”.
The business model as a whole remained unchanged. “Although anyone can access the library for free, the company’s business model is based on selling software as a service (SaaS) to companies” — Guillermo Rauch.
Investments
As mentioned earlier, the rebranding quickly paid off. Immediately after it, Vercel announced a successful round A — $21 million. Investors were: Accel, mentioned CRV, Naval Ravikant, Nat Friedman, Jordan Walke and others. Accel fund member — Daniel Levine — is a member of the Vercel board of directors.
The company went for the next round only after 8 months, in December 2020, and was able to raise $40 million. The biggest investor in this round was Google Ventures. Also, new investors were Greenoaks Capital, Bedrock Capital and Geodesic Capital. Bedrock founder Geoff Lewis is also a member of the Vercel board of directors.
The next round took place in June 2021. The company raised $102 million, received a valuation of $1.1 billion, thus becoming a unicorn company. The main investor was the company Bedrock Capital. All previous investors were retained and several new ones were added (8VC, Flex Capital, GGV, Latacora, Salesforce Ventures, and Tiger Global).
The last round took place in November 2021, during which Vercel raised $150 million. The main investor was GGV Capital, also all the previous investors supported the company (including Accel, Bedrock, and Google Ventures).
Private investments are also interesting. Guillermo, after leaving Automattic, became an investor himself and began investing mainly in emerging tech companies. Some of his seed investments were companies auth0 and scale, which soon became unicorns (Auth0 became the fifth with Argentine roots, that is, shortly before Vercel).
Soon after, their co-founders (Auth0 — Matias Woloski, scale — Alexandr Wang) — invested in Vercel.
The complete list of Vercel investors can be found on the company’s website.
Total investments in Vercel amounted to $313 million. This allowed the company not only to actively develop and attract people but also to make some acquisitions.
Purchases and Important Actions
One of the most important and valuable actions of the company was the attraction of Rich Harris, the creator of svelte. This happened in November 2021, 2 weeks before the completion of the last round of investments (and possibly played a significant role in the success of the round).
So far, the company has made 2 major acquisitions: the company Splitbee and the utility turborepo. The cost of both purchases is not named.
First, Vercel bought turborepo, in December 2021 — a utility created by Jared Palmer (he is also the creator of Formik and TSDX). “Turborepo is a high-performance build system for JavaScript and TypeScript codebases”. The main features of the utility are parallel assembly of applications in a monorepo and caching processes (including remote ones).
Jared himself joined the Vercel team after purchasing the utility, his main task was to speed up the assembly in Vercel.
The next purchase took place almost a year later, in October 2022. The company Splitbee was purchased — a platform for collecting real-time analytics, created only in 2020.
The co-founders of the company joined the Vercel team, their main task was to develop analytics tools within Vercel (in the service you can buy analytics collection, the price starts from $10 per project).
Open-Source Development
“Supporting open-source projects is an integral part of our mission “Make the Internet Faster””.
Despite several purchases — the main improvements come through integrating third-party services. For example, there is integration with Check.ly, which takes a URL and runs automatic end-to-end tests, simulating web browsers for this interface. Another interesting integration is made with Sanity CMS, together with them Vercel adds the possibility of editing the site on the site itself (next-preview.now.sh).
In total, Vercel has about 100 integrations (Mongo DB, Contenful, Wix, Shopify, AWS, Sentry, Slack, Auth0, etc.).
Vercel owns such frameworks and libraries as Next.js, Hyper, SWR, pkg, turbo, satori, serve, styled-jsx, ai, and other less popular utilities. Also, team members are authors of many libraries.
Next itself after the rebranding became 10 times more popular (from half a million to 5 million downloads weekly).
Vercel is also a sponsor of Nuxt, Astro, webpack, Babel, NextAuth, Parcel, and Unified and other open-source projects.
Team
Today the company has more than 200 employees, only an office in San Francisco, but most of the team works remotely from all over the world. This situation has been in the company from the very beginning, as its parent, Zeit, was founded by an Argentine, a Finn, and a Japanese, who often worked from different places. “From the very beginning, we were a remote company. We worked together from San Francisco, Argentina, Brazil, Finland, Japan, and Germany. We were fortunate to use remote work before covid forced us” — Guillermo Rauch.
In hiring, the company adheres to the policy of Guillermo’s first projects — they attract active participants in open-source. Vercel is also worked on by the creator of Webpack and Turbopack Tobias Koppers, creator of Svelte Rich Harris, React developers — Sebastian Markbåge, Andrew Clark, and Josh Story.
Most of them are hired by the company with the expectation of continuing work on their projects. So, Sebastian still heads the main React team, but also helps support the development of React in Vercel.
Guillermo himself, in addition to Vercel, is involved in investing. In April 2022, he received a second citizenship — American.
