€30m · Other round · Cloud · Grenoble, France
Grenoble-based Vates has raised €30m in its first external funding round from IRIS, through its Growth fund, and Bpifrance, through its Large Venture fund. After a decade of profitable, self-funded growth, the open-source virtualization company says it will invest in its next-generation platform, expand sales in North America and Europe, and enlarge its network of distributors, integrators and service providers. The co-founders remain majority shareholders.
The business model sells assurance around open code
Vates builds the infrastructure stack that runs and manages virtual machines: XCP-ng provides the hypervisor, while Xen Orchestra handles administration, backup, disaster recovery, automation and monitoring. The software remains open source and available whether or not a customer subscribes. Vates earns revenue by selling per-host support, maintenance and engineering assistance around the same codebase.
That distinction is central to the commercial mechanism. Organisations can inspect and deploy the software without accepting a proprietary licence as the price of entry, then pay when they need production support, long-term maintenance or help operating critical infrastructure. Vates says more than 1,000 customers in roughly 100 countries use its products, with revenue growing more than 65% in 2025. It reports that 90% of revenue comes from outside France and that North America accounts for nearly half of its business.
The model also makes continuity part of the product. Vates says the funding will not change the licences for XCP-ng or Xen Orchestra, and the founders retain control. For customers evaluating a migration, that promise matters because the choice of a virtualization layer affects operating practices, recovery systems and years of infrastructure investment. Open code reduces one form of dependency, but enterprise buyers still need confidence that the company maintaining it can support demanding environments over time.
Scale now depends on migration capacity
The financing arrives as organisations reassess virtualization suppliers following Broadcom's acquisition of VMware, according to Bpifrance's announcement. That market opening is larger than a software feature comparison: replacing a core infrastructure layer requires assessment, migration, integration and ongoing support. Vates therefore plans to invest not only in performance, storage, security and automation, but also in the partner capacity needed to deliver bigger projects across markets.
This shifts the execution test. Vates has already shown that an open-source support model can reach profitability and international customers. The €30m round must now turn that product credibility into repeatable enterprise migrations without weakening the predictable pricing and reversibility that distinguish the offer. Expanding the partner network can increase delivery capacity, but it also requires consistent implementation quality across third parties.
Explore this theme
The Infrastructure Test (Part I) — Alessia Russo, hosted on EUVC · 21 April 2026. It examines how dependence on an underlying platform shapes software defensibility. Vates approaches the same issue from the infrastructure layer, making the ability to inspect, control and leave the platform part of its customer proposition.
Sources checked:
Vates announcement · Bpifrance press release · Vates product overview · Vates pricing and support · Tech.eu Funding Explorer
