CrafterCMS Announces Second Round of Financing to Fuel Rapid Growth: Interview with CEO Mike Vertal
While 2022 has already been unpredictable in almost every way, the one persistent trend in the CMS market is the continuous flow of investment dollars.
Speaking of investments: the latest announcement comes from CrafterCMS – an open source Git-based headless platform for enterprises. The company revealed that it has closed on a second institutional round of funding from Lighter Capital, the leading fintech lender of non-dilutive financing to tech startups.
Crafter first partnered with Lighter Capital in 2019 with an investment of revenue-based debt, which was paid off ahead of schedule thanks to CrafterCMS's faster than anticipated growth and profitable operations. According to the company, this new and larger second round of capital will fuel continued growth for the niche CMS player.
Driving value in a competitive headless CMS marketplace
CrafterCMS is a Git-based headless content management system, allowing users to work locally in teams via an API-powered Git repo. This gives developers greater control over versioning while enabling them to work in their preferred languages with their favorite tools and processes. Crafter's flexible headless architecture provides everything a user needs to create modern digital experiences and connect to a wide array of omnichannel endpoints – including websites, mobile devices, kiosk screens, email, video, and more.
Crafter also has the distinction of being open source with an active community across a variety of channels. Developers can access a range of resources from source code to documentation and connect with the company and other users via Slack, Discord, and StackOverflow.
The platform offers self-managed, self-managed on-premises enterprise support, and fully-managed private SaaS/PaaS operations and support. All offerings are sold as recurring, annual support subscriptions.
Enhancing digital experiences in an omnichannel world
According to the company, Crafter appreciates high customer renewal rates, low customer churn, and strong upsell with major brands and enterprises across the globe – which has helped it achieve rapid growth. Crafter's enterprise customers range from the Fortune 500 to large government agencies to digital-native startups – all running mission-critical, highly scalable enterprise websites and various multi-channel digital experiences that include e-Commerce, OTT video, employee intranets, customer portals, interactive voice assistants, AR/VR experiences, and more.
"CrafterCMS continues to scale to meet growing customer demand, which we've seen accelerate as major enterprises and hyper-growth startups are looking for a modern content platform on which to build next-generation digital experiences," said Mike Vertal, President and CEO of CrafterCMS. "With growth comes the need for financing, and Lighter Capital has proven to be an ideal partner for us. This second round of capital will allow us to accelerate our expansion plans and do so without any of the ownership dilution of traditional venture capital financing. At the same time, it will foster the discipline to maintain both capital efficiency and a strong balance sheet for the long term, allowing us to focus entirely on driving customer success and nurturing our open source community."
Lighter Capital is the largest provider of non-dilutive debt capital to startups. It has revolutionized startup financing by making it easy for entrepreneurs to quickly access up to $4 million in non-dilutive growth and working capital through our tech-enabled lending process. With no hidden fees, warrants, or covenants, founders have full control over how to use the funds. Since 2010, Lighter has invested hundreds of millions of dollars of non-dilutive funding to hundreds of companies in the US, Canada, and Australia.
"Crafter is an ideal Lighter Capital client," said Jon Prentice, Investment Director at Lighter Capital. "We look for strong recurring revenue models and capital-efficient operators. Mike and his team have built a scaling company. Investment from Lighter allows them to immediately access capital to achieve goals and boost growth without dilution or changing the company's vision."
Q&A with Mike Vertal, President and CEO, CrafterCMS
CMS Critic had an opportunity to connect recently with Mike Vertal. He shared some of his views on the CMS market, the value of being open source, and their plans with Crafter Studio.
CMS Critic (CC): The CMS and DXP markets are getting extremely dense and commoditized, and headless seems to be taking up more of the air in the room. Where do you see Crafter having its greatest strategic advantage? And how will this new funding be used to support your growth goals?
Mike Vertal (MV): Yes, headless is all the rage, but this is only one of many features needed in a modern enterprise CMS. The CMS market is, of course, dense and highly fragmented, with many of the headless-only CMSs focused on simpler use cases. In contrast, CrafterCMS focuses on the needs of larger enterprises and fast-growing startups that have more sophisticated content management needs and who are building a wide variety of new digital experience applications. To address this segment of the market, Crafter’s unique differentiators include:
1) Git-based content repository: Unlike most other CMSs that are built on top of databases (either SQL or NoSQL), Crafter is built on top of Git as its content repository. This not only provides much more extensive content versioning, auditing, branching, and rollback capabilities but also allows developers to leverage GitOps to accelerate development cycles of content-enabled apps.
2) DevContentOps processes: Headless is only about building apps on top of APIs; Crafter also streamlines developer workflows by eliminating bottlenecks of traditional database-centric CMSs, enables better collaboration among the developer teams and content authoring teams, and eases integration with enterprise DevOps and CI/CD tools via APIs. This is what we call DevContentOps – integrating content management processes into the traditional DevOps processes and tooling.
3) Powerful and user-friendly content authoring: Many of the simpler headless CMSs have crippled the content authoring teams, leaving them with primitive content creation/editing/preview/workflow/publishing capabilities. In contrast, Crafter has a sophisticated content authoring toolset (Crafter Studio) that supports in-context editing, multi-channel previews, drag/drop experience building... that content teams can use to improve productivity regardless of the front-end technology that the development uses to build the end user experience. So whether the development team has used React, Angular, Vue, HTML5, A-Frame (for AR/VR), or whatever, the content authors get a truly WYSIWYG editing capability. This is quite unique in the industry.
4) Proven in larger enterprises: our clients include Marriott, MasterCard, Penn Mutual, BNY Mellon, Papa Johns, UK Government, US Navy, among many others. The funds will be used to continue investing in CrafterCMS development, including our upcoming Version 4 release that will significantly advance Crafter Studio (content authoring platform) and will add significantly more reusable plugins available on the CrafterCMS Marketplace, along with further investments in customer success and our open source community.
CC: What part is open source playing for buyers in 2022?
MV: Open source is slowly but surely taking over more of the enterprise, you just have to look at the tremendous success of Elastic, MongoDB, Confluent, Datastax and Gitlab to name just a few as proof. This is because savvy enterprise technology buyers realize that open source not only delivers better value over the long term, but also provides higher levels of security, agility, and innovation.
At CrafterCMS, we spend less than 20% of our revenues on sales/marketing expenses (compared with 70%-100% or more spent by proprietary and SaaS-only vendors), as our open source business model allows us to reach into enterprises much more cost effectively. Further, our open source community helps us 1) identify a wide range of new use cases and interesting new features, 2) contribute to the development efforts, 3) test and document early releases, and 4) find and resolve any security issues extremely rapidly, among a host of other benefits that are typical of open source projects.
CC: How are you adapting to the composable revolution that’s driving more MACH-based solution selling for headless platforms?
MV: CrafterCMS fits perfectly well into composable, MACH-based architectures. We have always focused exclusively on being a best-of-breed CMS, and not building out a full-suite of DXP capabilities. Furthermore, CrafterCMS itself is a MACH-based system. How?
Micro-services: CrafterCMS is composed of several decoupled services: content authoring, content delivery, content publisher, content search, Git-based content repository, user profiles, etc..
API-first: Both Crafter’s content authoring and content delivery systems are API-first headless platforms, supporting REST, GraphQL, Javascript (Nodejs, Next js, etc.), and Java APIs. Furthermore, Crafter supports extensible APIs, allowing server side APIs to be scripted, extended, created.
Cloud-native: Crafter’s content delivery system is stateless and serverless, allowing elastic scalability in any cloud and allowing operations to be extremely simple.
Because CrafterCMS itself is based on a MACH architecture, our users can integrate Crafter easily with other MACH-like services such as e-commerce tools like commercetools, cloud-based OTT video streaming services like AWS Media Services, interactive voice assistants such as Alexa devices, to name just a few. Moreover, many of these integrations are available off the shelf in the CrafterCMS Marketplace today, allowing composability of solutions with minimal development. As mentioned above, the new funding will allow us to invest in many more of these integrations and make them available on our marketplace.
About CrafterCMS
CrafterCMS replaces the broken paradigm of traditional content management and enables a new era of fast, agile and easier development of innovative digital experiences that benefits large enterprises and fast-growing startups. As an open-source, API-first and Git-based headless platform, CrafterCMS is amazing for developers, easy for content authors, and fantastic for DevContentOps. Enterprises can choose from support options that include self-hosted/self-managed, fully-managed private SaaS/PaaS in the cloud, and community-supported open source. Learn more about the open source project at https://craftercms.org, and enterprise solutions at https://craftercms.com.
About Lighter Capital
Lighter Capital is a fintech company revolutionizing startup finance by offering a new funding path for early-stage tech companies. We understand that an entrepreneur’s two greatest constraints are time and money, and we’ve developed technology to fund companies quickly and easily. We provide up to $4 million of non-dilutive growth capital in a fraction of the time it takes to raise from traditional sources. Based in the US and Australia, we’ve provided over 800 financings to 425+ companies across the US, Canada,