Zenhub raises $10M Series A led by Yaletown Partners

Zenhub, a project management solution for software teams, announced a $10 million Series A funding round. The round was led by Vancouver-based Yaletown Partners, offering another example of local capital being invested in local companies. Support also came from BMO Capital Partners and BDC Capital. BDC led the company’s $5.9 million seed round in February 2021.

“ZenHub built its reputation by being an efficient and painless way to get best practices for agile development running within software teams,” said Michael Sfalcin, principal at Yaletown Partners. “With the expansion of the platform, Zenhub continues to drive that efficiency in dev teams but now also enables visibility into the code base for non-technical employees, and that's what got us most excited about partnering with them. It's our view that a company's code base is the nucleus around which most modern organizations revolve, and because of that, Zenhub is in a great position to deliver a ton of value to its customers with its new platform.”

From the other side, Zenhub wanted to bring new investors to the table that would add a new dynamic. It came across Yaletown and was struck by its strong thesis on the developer ecosystem and developer tool space. Zenhub’s co-founder Aaron Upright specifically namechecked fellow Vancouver-based company Tasktop from Yaletown’s portfolio, a firm that navigated a successful exit last year.

“When we talked to people we knew from Tasktop, they were very impressed with Yaletown,” Upright said. “When we started engaging [Yaletown] in conversation, I think we found a fit with them very quickly. We see the world the same way. Software development is very much the nucleus of every modern business. More people need to be brought to the table in terms of software not being such a mystery in a black box.”

The “issue” with issue management: Also announced today is the expanded use of Zenhub’s project management platform beyond technical teams using GitHub, which is a go-to platform for developers and code writers. The first version of Zenhub was a Chrome plugin that simply injected a taskboard into GitHub to manage and track projects. Over the years, Zenhub evolved the product with all the hallmarks of software growth: added a lot of functionality, developed a lot of features, and moved up-market from serving startups to some of the largest enterprise companies in the world. The one thing that remained constant until today is the fact that users are required to possess a GitHub license in order to access Zenhub. So, to support its plugin-to-platform evolution, Zenhub is also announcing the launch of Zenhub Issues — a brand new issue management experience to enable internal and external stakeholders to create and collaborate on tasks with their technical teams. Zenhub Issues solves these challenges by allowing non-technical users to create issues, tasks, and track projects in Zenhub without requiring a GitHub account.

“Software development is increasingly becoming a team sport,” said Tyler Gaffney, Zenhub’s CEO. “Unfortunately, teams typically find themselves working in silos when it comes to the tools they use to plan and track work. The driving force behind our platform vision is to break down these silos and provide a solution that every stakeholder, whether internal or external, can rely on to understand the progress of software projects.”

The “zen” in ZenHub: Zenhub got its start in 2015 out of local innovation lab Axiom Zen, the birthplace, also, of Dapper Labs. Upright details that he and his co-founders built Zenhub to “scratch their own itch.” Within Axiom Zen, employees were trying to bring project management processes closer to the code it was being written for. As developers were building things for other customers and clients, Upright always felt like they were having to jump outside of where they were working in a game of digital hopscotch.The early workings of what would become Zenhub were found to have a positive impact on processes. As a very limited beta version began to roll out, good feedback arrived instantly. That’s when Upright and co made the decision to bring Zenhub outside of Axiom Zen and make it a full-fledged product with proper resources and a scrappy team. While it’s eight years and hundreds of millions of dollars later for Zenhub, GitHub remains a natural place for developers to work. Yet, it's often viewed as an unapproachable platform for non-technical team members and external collaborators. That’s where today’s shiny new Zenhub 2.0, er… 3.0, er…, heck, maybe even 10.0 comes in.