Can GitHub really be worth $2 billion?

It's reportedly seeking $200 million in its next round of funding

GitHub recently added mobile notifications to its software development platform.

GitHub recently added mobile notifications to its software development platform.

If youre looking to hire a developer, which is more important: her LinkedIn profile or samples of her code on GitHub?

Many would argue the latter, which helps to explain why the online code repository is reportedly closing in on a valuation of $2 billion.

"GitHub is an interesting company," said analyst Frank Scavo, president of Computer Economics. "It is partly a hosting service for developers and partly a social media site."

The San Francisco startup, which offers a popular code-sharing platform for software developers, is seeking a whopping $200 million in an upcoming private funding round that values the company as high as $2 billion, according to a report Monday from Bloomberg, which cited people familiar with the matter.

It received $100 million from Andreessen Horowitz in 2012, when its valuation was closer to $750 million.

GitHub declined to comment on the reports.

Claiming close to 10 million users, GitHub offers a place for programmers to share the code they're working on and solicit input on their projects. Competing in the same space is Atlassian, whose Bitbucket offering is also a Git-based repository hosting service.

GitHub offers free accounts for public projects as well as private repositories starting at $7 per month and enterprise pricing starting at $2,500 per 10-user seat pack per year, including maintenance, upgrades and technical support.

Though GitHub's history has been largely a matter of stellar growth and steady popularity, it did suffer a massive distributed denial-of-service (DDoS) attack earlier this year. Last year, co-founder Tom Preston-Werner left the company amid accusations of harassment and gender-based discrimination. An internal investigation cleared Preston-Werner of any wrongdoing.

But GitHub remains a key site for developers looking for a place to host projects both large and small.

It benefits from strong network effects, Scavo noted, in that the more developers use it, the more valuable GitHub becomes to other developers.

It's factors like that that account for its lofty valuation.

GitHub holds "an enviable position in developer workflows," said IDC analyst Al Hilwa. "Almost every day I hear from a startup who wants to be the GitHub of some domain it is launching in, which is indicative of the iconic status the company enjoys with developers."

Company-specific factors aside, there's also a lot of money in the market "looking for homes," said Rob Enderle, principal analyst with Enderle Group.

"It's a seller's market," he said. "That means you can cut deals you couldn't cut if things were tighter, and with Andreessen Horowitz behind it, GitHub has a certain amount of validity. I think it should be successful in getting this round."

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Tags business managementbusiness issuessoftwareinvestmentsapplication developmentGitHubDevelopment toolsInvestor relations

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Katherine Noyes

IDG News Service
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