Microsoft Buys GitHub for $7.5 Billion

Six years ago we invested an “eye-popping” $100 million into GitHub. This was not only a Series A investment and the first institutional money ever raised by the company, but it was also the largest single check we had ever written. We’d expected there to be quite a bit of criticism, and while a few made some good arguments, we simply had a different opinion. Where they saw us “overpaying,” we saw a once-in-a-decade company. You see, modern programming is about assembling code — in the form of libraries, open source work, etc. — as well as writing it, and code tends to belong in one place where it’s easy to access and that place was, is, and will be GitHub. At the time, it had over 3 million Git repositories — a nearly invincible position.

Cloud computing was nascent. Companies weren’t yet thinking about digital transformation. But software was eating the world, and it was being built on GitHub.

Today Microsoft announced they are acquiring GitHub for $7.5 billion. By combining the GitHub platform with Microsoft’s cloud offering, Satya Nadella and team aim to build the future of software development. GitHub brings the largest software code base in the world (over the past five years, user growth exploded to 28 million and GitHub has become the platform for all developers) to Microsoft’s Azure cloud platform while also staying open to all other clouds. The focus on the developer doesn’t change and there is a commitment to remaining an open platform.

I remember the first time I met the GitHub founding team — Chris Wanstrath, Tom Preston-Werner, PJ Hyett, and Scott Chacon — in January 2012. Ostensibly, it was set up for me to convince them to let us invest, but we ended up spending all our time getting to know each and talking about the seemingly unlimited opportunities for GitHub. It was that dinner conversation that convinced me that GitHub was a phenomenon that is almost never seen in enterprise software. The company was growing at 100% with no sales organization, and the uptake was completely organic and looked more like a very successful consumer software company. They had captured lightning in a bottle!

The original GitHub office was a nondescript upstairs loft on Brannan Street. The front door to the office looked like the entrance to an abandoned warehouse, with no sign and a doorbell. Not exactly the kind of experience that companies all over the world would trust with their most precious asset—software. It was pretty clear from that and our first board meeting that we had some work to do. At that time, there wasn’t much in the way of anything — org charts, financial plans, sales, you name it — but there was revenue, cash flow, and a loyal community. Since that first board meeting in 2012, the team really went to work, the number of users continued to accelerate, and the love of GitHub by the developer community became unstoppable. I came to realize that if I ever have to choose between a group of professional business managers or a talented group of passionate developers with amazing product-market fit like GitHub, I am investing in GitHub every time.

Through the amazing leadership of Chris and the executive team and the work of the 800-strong Hubbers, the original vision — of becoming the place where code is developed — has become reality and has literally changed the world. It has been an honor serving such a wonderful company and being part of the GitHub story. The combination of Microsoft and GitHub is a powerful one and I know that Satya and team understand the incredible opportunity. I look forward to this next chapter in the future of software.