This CEO explains how the hottest trend in software development helped his startup take off and raise $50 million in new funding

Charles Ramsey, CEO of Sauce Labs, in a photo from 2019.

Many organizations are starting to embrace Agile, a kind of process of software development that involves working on small pieces of a project in parallel and frequent iteration.
One of the companies that's benefitting from that shift is Sauce Labs, a San Francisco startup that offers an automated app testing service.
Sauce Labs' system is designed to help organizations speed up the testing of their web and mobile apps.
It just raised $50 million that it plans to use to help expand its offerings.

It's taken a while, but Sauce Labs may finally be right where it wants to be.

The San Francisco startup offers a cloud-based service that allows developers to automatically test their web and mobile applications for bugs. It specializes in offering programmers the chance to test their applications on multiple simulated devices or browsers at once, allowing them to markedly speed up the process of development.

The company, which has about 300 employees and development teams in Berlin and Warsaw, announced last that it's secured $50 million in new, late-stage venture funding from Riverwood Capital. The new company's new funds came with a valuation north of $380 million, or more than double what it was in 2016 when Sauce Labs last raised capital.

The company launched 10 years ago, but it didn't really take off until an industry-wide shift in app development took root, said Charles Ramsey, Sauce Labs's CEO. But now that it has, business is booming, he said.

"The market is changing rapidly, to our advantage," he said.

Sauce Labs is benefitting from an Agile approach

In recent years, a growing number of companies have embraced so-called Agile software development. In Agile, big software projects are divided up into discrete chunks. Small teams typically work on those different pieces of the projects in parallel and by iterating on them repeatedly. The process usually allows organizations to develop software faster than with older methods, in which development is generally done sequentially and only after each step is completed, and allows them to more rapidly fix problems and introduce new features.

One of the things that can delay Agile development, though, is testing each new feature in and iteration of an app, Ramsey said. In the past, testing was a largely manual process, requiring actual human beings — whether volunteers or paid employees — to try out apps and features, he said. That can be a slow, potentially expensive or logistically challenging, and often incomplete; it's often hard to test all of an app's features in a set amount of time.

Read this: $25 billion Atlassian is releasing a new tool to help developers release code faster as it takes on GitHub

That's where Sauce Labs' service comes in. By offering automated testing and allowing organizations to tap into multiple simulators simultaneously, its service can quicken the process and allow it to be more comprehensive.

"Testing is a constraint to really great Agile development," Ramsey said, "and so we're getting a lot of attention."

It has more offerings in the works

Sauce Labs' service, which it offers as a subscription, allows organizations to test their apps to make sure they work across different operating systems, browsers, and devices. In addition to its simulators and emulators, it also offers a service that allows organizations near the end of the development process to try out their apps on actual devices via manual testing.

And the company, whose offerings have already become popular in the financial services, health care, and media industries, is planning to offer an even more comprehensive service, Ramsey said. It's developing a feature that would allow programmers to test out small snippets of code. The feature reflects how the development environment continues to evolve as more organizations are embracing Agile, he said. Those organizations are wanting to test their code more often and earlier in the development process, he said.

Sauce Labs plans to continue to add on to its offerings, including through an acquisition that Ramsey said is imminent but declined to discuss. It should have the opportunity to do so, thanks to this newest round of funding.

"We want people to be able to test at every step of the development process with the appropriate tool," Ramsey said.

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