French technology company Vates has raised €30 million (approximately $33.6 million) in a funding round led by IRIS’s Growth fund and Bpifrance’s Large Venture fund, as it seeks to accelerate its expansion in North America and strengthen its position in the enterprise virtualization market.
The investment follows nearly a decade of self-funded growth. Vates, which develops the open-source virtualization platform XCP-ng and the Vates Virtualization Management Stack (Vates VMS), now serves more than 1,000 customers across approximately 100 countries.
North America already accounts for nearly half of the company’s business, while 90% of its revenue comes from markets outside France. Customers include Harman, AMD and North Carolina State University, according to the company.
Vates reported growth exceeding 65% in 2025 and said it was recently included in Gartner’s Magic Quadrant for Server Virtualization Platforms.
Enterprise Virtualization Market Faces Changing Competitive Conditions
The funding comes as businesses reconsider their virtualization infrastructure amid changes in software licensing, vendor consolidation and rising concerns about long-term technology costs.
Virtualization allows organizations to run multiple virtual machines and workloads on shared physical servers, helping companies manage computing resources, applications and data center operations.
The technology is widely used across enterprise IT environments, making pricing structures, software compatibility and vendor support important considerations for organizations managing critical infrastructure.
Broadcom’s acquisition of VMware has contributed to changes in the virtualization market, prompting some enterprises to evaluate alternative platforms and licensing arrangements.
Vates is positioning its open-source technology as an option for organizations seeking greater control over infrastructure architecture, software deployment and future migration decisions.
Unlike proprietary platforms that may require customers to remain within a particular vendor’s ecosystem, open-source solutions can offer greater flexibility to modify and integrate software. However, enterprise adoption still depends on technical compatibility, operational reliability, support capabilities and migration costs.
North America Accounts for Nearly Half of Vates’ Business
The investment is intended to accelerate growth in an established market rather than finance Vates’ initial entry into the United States.
According to the company, North America already represents approximately 50% of its business, reflecting demand from enterprises, educational institutions and technology organizations.
Vates plans to expand its sales, marketing and customer-support operations in the region while developing relationships with distributors, systems integrators and technology partners.
The company will also target larger enterprises, public-sector organizations and service providers as it increases its capacity to support complex infrastructure deployments.
Funding Will Support Technology Development
Part of the €30 million investment will finance the next generation of the Vates virtualization platform.
Development priorities include performance, storage, security, automation and the management of large-scale computing environments.
The company also plans to address changing infrastructure requirements associated with artificial intelligence workloads, which are increasing demand for computing capacity and more complex data center management.
Vates will invest in its partner network to support larger customer migrations and international deployments.
These initiatives are intended to strengthen the company’s ability to compete for enterprise customers that require technical support, predictable operating costs and infrastructure flexibility.
Founders Retain Majority Ownership
Vates’ co-founders will remain majority shareholders following the transaction, preserving their control over the company’s strategic direction.
The participation of IRIS and Bpifrance provides additional capital and institutional support for international expansion.
CEO and co-founder Olivier Lambert said the funding will allow the company to accelerate its existing strategy rather than change its business model.
The company intends to maintain its focus on open-source development, interoperability and customer choice while expanding its commercial operations.
Open-Source Infrastructure Attracts Investment
The financing illustrates investor interest in enterprise software companies offering alternatives to established infrastructure providers.
For organizations operating large computing environments, virtualization decisions can affect software spending, operational flexibility and the complexity of future technology migrations.
Vates enters its next phase with an established international customer base and a significant share of revenue generated outside its domestic market.
The company’s expansion will depend on its ability to translate demand for alternative virtualization platforms into sustained enterprise adoption while maintaining the technical capabilities and support services required by larger customers.
