Since founding Explosion in 2016, we’ve run the company as a profitable
business. This stable platform has helped spaCy grow to one
of Python’s most popular open-source projects. We’ve funded spaCy from sales of
our annotation tool Prodigy, which we’ve now sold to over
500 companies, with thousands of customers in total. The next step for Explosion
is Prodigy Teams: a hosted version that adds collaboration and production
stability features, while maintaining the data privacy and programmability.
Doing this project well is much more important to us than doing it cheaply, so
we decided to consider external investment, so long as we could find a deal that
wouldn’t compromise the direction or stability of the company. We’re pleased
to announce that we’ve found an investment that ticks all the boxes.
SignalFire have made an investment of
$6 million into ExplosionAI GmbH, in return for 5% of the company and warrants
that will allow them to invest a further $12
million at the same price.
Oana Olteanu will join our board as
SignalFire’s representative. The funds will be used to finish our next product,
Prodigy Teams. The funding has also allowed us to expand the spaCy team without
jeopardizing the project’s long-term sustainability or stability.
A lot has changed since 2016, and in that time we’ve earned the right to say
that our way of running Explosion has been an objective success. We’ve succeeded
because you’ve trusted us enough to invest effort into the software we’ve
developed. We’ve asked you to build on top of our open-source library spaCy or
purchase our annotation tool Prodigy, and hundreds of thousands of you have
taken us up on that.
It’s become common for people in our position to turn around and act as though
they owe their users nothing. It’s common, but that doesn’t make it decent. It’s
also not good business. We’ve talked before about
building a decent software company,
and the first prerequisite has been to make sure we’re actually in control of
where the company ends up. We’ve seen most venture investments as incompatible
with that. It would have been wrong to promise you all that our plan was
sincerity and stability, while promising investors that our plan was to go big
or go home.
For this deal, we had some other requests that were important to us. We insist
that the company’s corporate structure match its operating reality, so Explosion
is staying a German company, and not reincorporating in the U.S. We also asked
SignalFire to include what’s now known as a
Weinstein clause,
a contract representation that would help push the worst actors out of the
industry if widely adopted. And most importantly, we haven’t promised any
timeline for an exit or further investment, and our goal is to run a stable and
profitable company.
We still want to keep the Explosion team quite small for now, as we’ve always
believed that a larger team doesn’t necessarily build better software. We’ve
been delighted to announce that some amazing people have agreed to
join the company, and we have some more announcements on the way. Most of all,
we look forward to continuing to build software as before. Our plans for the
company are still the same — although we definitely have some cool things we’re
excited to share once they’re ready.