Vates, a French open-source virtualization specialist based in Grenoble, has secured €30 million in the first funding round in its history. The capital comes from IRIS through its Growth fund and Bpifrance through its Large Venture fund. The company said the investment will accelerate an existing strategy while preserving its independence and open source principles.
A Market Opening After Broadcom
The company has been profitable and self-funded since 2016, but the acquisition of VMware by Broadcom changed the competitive landscape. Many organizations have started looking for virtualization platforms with predictable costs, real interoperability, and the ability to migrate away when needed. Vates argues that its open source model is positioned to capture that demand.
From Self-Funded Growth to Gartner Recognition
Founded in 2012 as an open source integrator and audit firm, Vates now serves more than 1,000 customers in around 100 countries. The company has over 150 employees, more than 2 million product downloads, and a revenue base that is 90% international. North America accounts for close to half of its business, growth surpassed 65% in 2025, and Vates expects a first appearance in the 2026 Gartner Magic Quadrant for Server Virtualization Platforms.
Where the €30 Million Goes
Vates plans to direct most of the new funding into technology development. Priorities include performance, storage, security, automation, large-scale virtualization, and the infrastructure demands of artificial intelligence workloads. The second priority is international growth, with stronger sales and marketing teams in North America and key European markets for large enterprises, public-sector organizations, and service providers.
Expanding Partnerships and Hiring
A third stream will focus on building a broader network of distributors, integrators, service providers, and technology partners. Vates wants these partners to handle larger migration and transformation projects across customer locations. The company said hiring will support all three priorities, with open positions already listed on its careers page.
Open Source and Independence Remain Core
Vates emphasized that the co-founders remain majority shareholders and that the open source licenses for XCP-ng and Xen Orchestra are unchanged. The company sells support and services around software that is the same for subscribers and non-subscribers alike. It said the funding will not move features behind a paywall or alter the development model that has kept it profitable for a decade.
Investors See Strategic European Technology
IRIS and Bpifrance framed the investment as support for a European technology champion in critical digital infrastructure. Nicolas Herschtel, partner at IRIS, said Vates demonstrates that open source can meet the highest requirements of the market. Cindy Ung, investment director for Large Venture at Bpifrance, cited the quality of the team, the relevance of the open source model, and the strategic importance of the technology.
Sovereignty and Partner Momentum
The sovereignty argument already shapes Vates' partnerships. In September 2025, Eviden, the Atos Group product brand, teamed up with Vates to offer what the companies described as a fully sovereign stack from hardware to the virtualization platform. Bpifrance's support reflects a broader investor focus on European control over critical technologies.
With Broadcom's VMware changes creating an opening, Vates still faces competition from Nutanix, Red Hat, and Microsoft. The company is betting that interoperability, reversibility, and freedom of choice will attract enterprise and public-sector customers at scale. The €30 million round gives Vates the resources to accelerate without abandoning the open source principles that built its business.