The startup that secretly runs the internet just got acquired by one of its biggest rivals for $670 million (FFIV)

Nginx

Nginx, one of the most important software companies you’ve never heard of, is getting bought by its rival, the $9.6 billion F5 Networks, in a deal valued at about $670 million.
Nginx powers over half of the busiest websites in the world, including sites run by Starbucks and McDonald’s.
F5 Networks helps developers secure and manage their web apps — which made it a rival to Nginx, and now also a natural fit as an acquirer.
Nginx’s leadership team will be joining F5 with the acquisition, and its offices will stay open.
Nginx had raised $103 million, with investors including Goldman Sachs, Telstra Ventures, and New Enterprise Associates.

Nginx (pronounced "engine-X"), the company behind the very popular open source web server software of the same name, has been acquired by F5 Networks, a rival, which is valued at about $9.6 billion on the public market.

In a press release on Monday, F5 says that it plans to acquire all shares of Nginx in a deal that values the company at $670 million, "subject to certain adjustments," and that Nginx CEO Gus Robertson and its cofounders Igor Sysoev and Maxim Konovalov will all be staying on as employees of F5 after the acquisition closes.

While Nginx isn’t the largest or most valuable software company, it’s one of the startups that secretly runs the internet: The Nginx web server is the third most widely used in the world, behind only Microsoft and Apache, and ahead of Google.

Well over half of the busiest websites in the world, including ones operated by McDonalds and Starbucks, rely on Nginx. Last year, Robertson told Business Insider that its business had seen 100% year-over-year growth every year since 2014, with companies coming to Nginx to help make their websites load faster and more efficiently.

The core Nginx web server is available as open source, meaning that anybody can download and use the code as they wish. In recent years, Nginx’s main push to build the business has been Nginx Plus, a paid premium service that helps developers build modern applications for mega-clouds like Amazon Web Services and Microsoft Azure.

This is where F5 and Nginx became rivals — and also where a tie-up starts to make sense.

F5 helps companies make sure that their apps and software are both highly secure and highly performant, assisting with spotting and solving bottlenecks. Some of F5’s products, then, competed head-to-head with Nginx and Nginx Plus.

François Locoh-Donou, CEO and President of F5 Networks, praises Nginx for its "leading software application delivery and API management solutions," as well as its "unparalleled credibility and brand recognition" and "massive open source user base" as factors that dovetail nicely with its business.

The Nginx brand will stick around, as will its headquarters in San Francisco, though plans are underway to introduce integrations with F5’s other security and application monitoring tools, says the release. Robertson will report directly to Locoh-Donou as part of F5’s senior leadership team following the close.

In its lifespan, Nginx had raised $103 million from investors including Goldman Sachs, Telstra Ventures, and New Enterprise Associates, though we don’t know the company’s most recent private valuation.

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Source: Business Insider – mweinberger@businessinsider.com (Matt Weinberger)