
Mattermost Raises $20M Series A Funding - ylere
https://mattermost.com/blog/mattermost-raises-20m-series-a-funding/
======
h3throw
When I worked at Uber we used this an it was internally called "uChat". I have
two things to note about this:

1) When uChat was first rolled out the team who ran the rollout did everything
they could to make it seem as though they had created uChat from scratch and
that it was an internal tool, even though everyone knew it wasn't. The rollout
was comically inefficient and the platform didn't scale at all to Uber's size.
The uChat team then tried at an all-hands to talk about what a great job they
had done building uChat which was followed by a slew of questions around all
of uChat's massive failings such that the CEO started grilling them a bit. It
was both embarrassing and strangely funny to watch what was either their total
lack of self-awareness or their blatant misrepresentation of everything they
had done.

2) When I left Uber in November of last year, uChat was still pretty
dysfunctional. I use Slack today in my new role and it's a MASSIVE step up.

~~~
it33
Hi @h3throw, Mattermost CEO here. I highly appreciate your feedback.

People care a lot about their communication systems and we're continually
listening and working to improve.

The $20M Series A helps us more quickly narrow the gap between open source and
proprietary solutions.

We want to continue to invest, grow and raise funding so we can relentlessly
improve open source options.

I've found that the customers that choose Mattermost have a long term view.
They're joining us on the journey that brings more choice to the market. They
share the belief that the world can be made safer and more productive through
open source technologies.

A $20M Series A may not seem like a lot compared to the $1.2B Slack has raised
to date--But it's four times the size of Slack's $5M Series A in 2010:
[https://www.crunchbase.com/funding_round/slack-series-a--
539...](https://www.crunchbase.com/funding_round/slack-series-a--539c502a)

@h3throw, may I beg you for a favor?

So I can learn more about addressing your comment in 2), could you help share
one thing we can improve?

~~~
jabberthemutt
FYI this comment comes across as very unnatural marketing through 'community
engagement', hijacking the top comment. This is HN not some business Bros you
can lull to market with 'journey' fluff. Please don't abuse HN.

~~~
it33
Thanks @jabberthemutt, you might be right on the marketing-y speak for HN.

Basically I was one of the people that started the open source project and I'm
trying to find out what the top issues are so we can fix them.

~~~
jabberthemutt
The last lines would have sufficed then! ;)

Thanks for your wonderful software BTW!

~~~
it33
Thanks @jabberthemutt!!

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silvester23
Glad to see them doing well. Working for a company that legally cannot use
services that are not self-hosted can be quite a challenge and Mattermost
really is a godsend in that regard.

~~~
meritt
We're under no legal requirement but I simply don't trust Slack employees to
be good stewards of our data. On a UI/UX basis, Slack and Discord are far
superior to Mattermost, so hopefully they can use this funding to close that
gap.

~~~
eggie5
Probably a good call. Slack trains recommender systems w/ all user data mixed
together. Although w/ attempts to preserve privacy... See their paper from
recsys '18 Vancouver.

~~~
ddorian43
Recommeneder for what ?

~~~
drdaeman
The only recommendations I remember on Slack are for channel participation -
accidental suggestions to leave some I don't really read any much, and to join
some I may be interested in.

YMMV, but for me that's a very low value feature.

~~~
ddorian43
The same for me. That's why I was asking.

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albertgoeswoof
Is it really not possible to bootstrap this or raise through debt? Why do you
need $20m to compete in this market?

I wish more companies would avoid taking large outside investment, but maybe
that’s unrealistic.

~~~
lojack
Whats wrong with taking large outside investment if the terms are favorable?

As an extreme example, if I thought my company was worth $40m and someone
offered $20m in exchange for 10% of my company I would absolutely take that
deal whether or not I needed the money.

The problem might not be that the company is taking a deal when they
shouldn't. It very well could be that the investors are overpaying. It's also
totally possible that this is a good deal if it helps the company get a bigger
slice of the market because they can grow quicker.

~~~
albertgoeswoof
You’d take that money, and now you have a 200m dollar company, so you need to
hire, market and scale like a 200m dollar company. And btw you need to be
worth a lot more than 200m next year otherwise your investors (who have
significant influence) will be pissed off.

So instead of continuing to deliver for your current customers and users you
start chasing bigger things, and if you’re lucky it works, if not you fail and
your company burns all the cash in a couple of years and files for bankruptcy.

~~~
exolymph
You're both right. Whether taking VC capital makes sense is context-dependent.
What kind of business is it, and what are the market dynamics? What are your
own goals for the business? Etc.

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the_common_man
I really hope they make the free version of mattermost a bit more safe to use.
Currently, any user can archive the channel and the security is really scary.

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mac01021
Does the thing they're trying to to build really cost more than 20M to build?

If so, why? That sum buys a lot of engineering and sales hours.

And if not, why raise so much?

~~~
s_dev
Slack is raising a lot more money. Mattermost stands purely as a decent
competitor to Slack.

~~~
h1d
Is mattermost the most popular self hosted alternative to slack now? I don't
usually hear about rocket chat lately.

~~~
s_dev
Yes -- I would think laregely because GitLab include in their instances thus
Mattermost is the devlopers/tech persons choice of chat app while Slack seems
more suited to general public and GSuite Hangouts will likely become the
enterprise option due so many enterprises already paying Google for email
services etc.

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secfirstmd
I'm a big fan Mattermost but it really needs to spend this money on:

-making decent mobile apps. I know the current Android one is awful -introducing end to end encryption for conversations

~~~
it33
Thanks @secfirstmd!

Just curious:

\- Which version of the mobile apps are you using? We've been making
significant improvements on Android \- Is your use case for E2E more for
enterprise or is it more for online communities (what kind of community)?

Trying to understand more,

~~~
secfirstmd
Hi. So using the version on 18th Jan 2019. I love the tool and deploy and use
it a lot but the Android still needs more work.

Regarding E2E. We use Mattermost for online communities. Primarily human
rights defenders, aid workers and journalists all over the world. There lives
are very clearly at risk in many cases so without E2E for a lot of them we
unfortunately cannot use Mattermost as surveillance is an issue.

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futureastronaut
Is it normal for a startup this old to raise a Series A?

~~~
dalbasal
"Series A" is just a shorthand. Doesn't mean anything too specific.

~~~
naveen99
(Shorthand for first formal vc round.)

B is second...

~~~
exolymph
Seed rounds can still be pretty formal.

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LeicaLatte
Mattermost gets so many more things right. Switched from Slack in 2018 and
never going back.

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ptman
Mattermost is open core and doesn't federate. Matrix.org / riot.im is the
better alternative, even if it has taken them a longer time to get to this
point.

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carlsborg
Slack will acquire them

~~~
btown
I actually think it's more likely Microsoft will acquire them. A strong
history of on-prem solutions, mixed reception to their Slack-killer Microsoft
Teams, and a newfound mandate to create open and interoperable solutions make
it a clear option.

~~~
Uhhrrr
As someone who is stuck with Teams at work and uses Slack with a small circle
of friends, I'd say Teams is mostly acceptable. If either one were to replace
the other in either context, I wouldn't care.

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s09dfhks
how soon until our ultra-paranoid security team convinces our company we need
to switch to this

