- Vates raises €30M from IRIS and Bpifrance to scale an open-source alternative to VMware.
- Broadcom’s VMware takeover is pushing buyers to rethink their virtualisation vendors.
- Vates reports 65% growth in 2025, and 90% of its revenue comes from outside France.
For 14 years, Vates grew without a large outside cheque. Then Broadcom bought VMware, and customers started looking for a way out. The company, founded in Grenoble, France, has now raised €30 million from IRIS’ Growth fund and Bpifrance’s Large Venture fund to win some of them over.
Vates sells an open-source virtualisation stack. Its core is XCP-ng, a hypervisor that lets one physical server run many virtual machines, plus Xen Orchestra, a console for managing and backing them up. Co-founders Olivier Lambert, Nithida Vialle, and Julien Fontanett remain majority shareholders after the round.
“We are not raising funds to change our strategy, but to accelerate the one we have pursued from the beginning. Today, we have the technology, the teams, an international presence and recognition from the market. This funding gives us the resources to execute much faster and operate at an entirely different scale, without compromising our independence or the open-source principles that have driven our success,” said Lambert, CEO and co-founder of Vates.
From audit consultancy to Gartner’s quadrant
Vates started in 2012 as an open-source integrator and audit firm, according to its own timeline. It became a software publisher with the first commercial edition of Xen Orchestra and launched XCP-ng through a Kickstarter campaign that raised nearly 650% of its goal. Turnover reached €1 million at the end of 2018, and a September 2025 partnership announcement with Eviden listed 2024 revenue at €4 million.
The company says it has been profitable and self-funded since 2016. It serves more than 1,000 customers in around 100 countries, 90% of its revenue comes from outside France, and North America accounts for close to half of its business. Growth topped 65% in 2025. Vates did not say whether that figure refers to revenue. If it does, 2025 sales would be at least €6.6 million on the 2024 base.
Gartner published its Magic Quadrant for Server Virtualization Platforms. It lists 17 vendors, including Broadcom’s VMware, Nutanix, Microsoft, Red Hat, Platform9, and Proxmox. Vates says it appears for the first time and calls itself one of the few European vendors on the list. Neither the release nor Gartner’s public abstract says where in the quadrant it sits.
A €30M plan against richer rivals
Vates will spend the money on three things. The first is the next generation of its platform, covering performance, storage, security, automation, large-scale virtualisation, and the demands of AI workloads. The second is sales and marketing in North America and key European markets, aimed at larger enterprises, public-sector organisations, and service providers. The third is a bigger network of distributors, integrators, service providers, and technology partners to handle larger migrations.
The opening is real. Broadcom completed its VMware acquisition in November 2023 and moved customers to subscription bundles. Gartner expects most VMware customers’ bills to rise 200% to 500% at renewal, The Register reported in 2024. The server virtualisation software market was worth about $9.3 billion in 2024 and should reach $13.8 billion by 2030, growing 6.7% a year, according to Research And Markets. Other publishers’ estimates differ.
The rivals are bigger. Nutanix, which says Gartner named it a Leader in the new quadrant, agreed in February 2026 to sell AMD $150 million of its shares. The chipmaker will also fund up to $100 million of joint engineering and sales work. Nutanix reported $723 million in quarterly revenue alongside that deal. Platform9, also on Gartner’s list, last disclosed a $26 million Series E in June 2022, taking its total funding to about $100 million, according to CB Insights.
Against that, €30 million is a large cheque for a company that reported €4 million in 2024 revenue, and a small one beside Nutanix’s AMD deal. Vates pitches interoperability, reversibility, and freedom of choice instead. Hackuity, the Lyon cybersecurity company TFN covered in September, makes a similar argument to European security buyers: independence from the big American and Israeli suites is worth paying for.
Why IRIS and Bpifrance are backing a French open-source challenger
IRIS is a European venture and growth firm with offices in Paris, Berlin, and Munich. It has backed unicorns including Exotec, Forto, and Kyriba, according to Unquote, along with infrastructure software companies such as Scality.
“Vates demonstrates that open source can meet the highest requirements of the market. Its virtualization platform is now adopted by organizations of all sizes around the world, including large enterprises operating critical environments where security requirements are particularly demanding,” said Nicolas Herschtel, partner at IRIS.
Herschtel has sat on the other side of this table. Before InfraVia and IRIS, he was deputy managing director at Large Venture, the growth fund of Bpifrance, where he led digital investments, according to IRIS. He now co-invests with his former employer.
“This investment fully reflects Bpifrance’s commitment to supporting the emergence of a French and European technology champion capable of strengthening the continent’s digital sovereignty, securing critical infrastructure and contributing to the development of a European industrial ecosystem around strategic technologies,” added Cindy Ung, investment director for Large Venture at Bpifrance.
The sovereignty argument already shapes Vates’ partnerships. Eviden, the Atos Group’s product brand, teamed up with it in September 2025 to offer what the two called a 100% sovereign stack from hardware to virtualisation platform. TFN’s September coverage of Arlequin AI, which Bpifrance’s Defence Innovation Fund also backed, showed the same logic in AI: investors treating control over critical technology as a reason to fund a European company.
Broadcom gave Vates an opening, not a customer list. Nutanix has AMD’s money behind an AI push, and Red Hat and Microsoft sit on the same Gartner chart. Vates must show that an open-source, support-led model can reach the large enterprise and public-sector accounts it now targets, with a team that numbered more than 60 in 2024.
