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NGINX agrees to F5's $670M buyout after open-source web server bet
F5 Networks agreed on 2019-03-11 to buy all of NGINX for about $670M, paying for an open-source project trusted by more than 375 million sites.
NGINX Inc.
What the business is
NGINX, Inc. is the company behind the open-source nginx web server and reverse proxy, selling NGINX Plus and the NGINX Application Platform to enterprises modernizing their applications.
How it started
nginx began as an open-source web server whose idea dates to 2002; commenters on the acquisition thread describe it as the work of a single developer who later became NGINX Inc.'s CTO. Runa Capital, one of the first three investors, says it backed the company in 2011 and sums up the arc as 'from idea in 2002 to exit in 2019.' By the sale NGINX's investors also included e.ventures, NEA, Index Ventures, Goldman Sachs, MSD Capital, Telstra Ventures and Blue Cloud Ventures.
What happened
NGINX Inc. built a commercial layer on the free core: NGINX Plus subscriptions and the NGINX Application Platform for modernizing legacy and microservices applications, with Netflix, Starbucks and McDonald's counted as customers. Weeks before the deal its marketing still pushed enterprises to replace F5 with NGINX, and commenters priced a software NGINX setup far below F5's BIG-IP appliances — the open-source challenger was already chasing the ADC leader's customers. On 2019-03-11 the acquisition thread drew 1,057 points and 383 comments, with developers debating what an F5-owned NGINX meant for the open-source project and for open-core business models.
How it ended up
On 2019-03-11 F5 Networks announced a definitive agreement to acquire all shares of privately held NGINX for about $670 million in cash, funded from its balance sheet, with NGINX shareholder approval in hand and closing expected in Q2 2019. F5 said it would keep the NGINX brand and San Francisco operations, with founders Igor Sysoev and Maxim Konovalov and CEO Gus Robertson continuing to lead NGINX inside F5 — ending the startup's run as an independent company.
Background
NGINX, Inc. is the company behind nginx, the open-source web server and reverse proxy that F5's acquisition announcement says is trusted by more than 375 million sites. Its bet was that a free, ubiquitous piece of infrastructure could grow a paid enterprise business: give the web server away, sell the application platform, and let the software eat its way from developers up to the enterprises that bought application delivery.
The project's idea dates to 2002, when Igor Sysoev started writing what became the nginx web server; HN commenters describe it as the work of a single developer who later became NGINX Inc.'s CTO. Runa Capital, one of the first three investors, says it backed the company in 2011 and sums up the arc as 'from idea in 2002 to exit in 2019.' By the time of the sale the shareholder list also included e.ventures, NEA, Index Ventures, Goldman Sachs, MSD Capital, Telstra Ventures and Blue Cloud Ventures.
The commercial layer came through NGINX Plus and the NGINX Application Platform for modernizing legacy and microservices applications, with Netflix, Starbucks and McDonald's among the customers. Weeks before the deal NGINX marketing was still telling enterprises to replace F5 with NGINX, and commenters compared the cost of NGINX software with F5's BIG-IP appliances — the open-source challenger was already going after the ADC leader's base.
F5 announced the deal on 2019-03-11: about $670 million in cash for all shares of privately held NGINX, funded from F5's balance sheet, expected to close in Q2 2019 with the NGINX brand, founders and CEO kept inside F5. The acquisition thread that day drew 1,057 points and 383 comments on Hacker News, and by 2026-09-05 NGINX operates as F5's product family — the exit validated the open-source bet when a hardware incumbent paid to own the software disruption.
What has to be true
- F5's announcement called NGINX's open-source community 'one of the most attractive elements' of the deal — the free project's reach, not its standalone revenue, was what $670M bought.
- NGINX was already competing for F5's customers: its marketing pushed replacing F5 weeks before the deal, so buying the startup removed a software threat to F5's appliance business.
- The economics had flipped: HN commenters compared a roughly $30k NGINX software setup against a $175k BIG-IP appliance, the price gap that turns open source into the CFO's choice.
- The buyer supplied what NGINX lacked: CEO Gus Robertson said F5 gave NGINX access to tens of thousands of customers and partners, the enterprise channel a developer-led company had not built alone.
What can be applied
Give the core away and expect the exit to come from the incumbent whose market the free software is eating: F5 paid $670M to own the disruption NGINX already represented.
Aftermath
As of 2026-09-05 NGINX is F5's product family: f5.com sells NGINX One, NGINX Plus, NGINX Ingress Controller, NGINXaaS for Azure and Google Cloud and WAF/DoS products aimed at cloud-native and AI traffic, and lists TrustRadius Top Rated awards for 2024 and 2026 while the open-source project remains at nginx.org. Seven years after the roughly $670M deal, the NGINX brand and software line are central to F5's cloud strategy; this material records no standalone NGINX financials, so post-acquisition revenue is not stated.
Sources
- Nginx to Be Acquired by F5 Networks
- F5 Acquires NGINX to Bridge NetOps & DevOps, Providing Customers with Consistent Application Services Across Every Environment
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