The 2025 State of Commercial Open Source report finds that venture-backed commercial open source software (COSS) companies raised $26.4 billion in 2024 and had higher average exit valuations than closed-source peers in the report’s comparisons. Those are group-level findings—not evidence that every open source company will outperform, or that open source itself caused the difference.
What is the 2025 State of Commercial Open Source?
It is a report on the financial outcomes of commercial open source companies and the relationship between company community indicators and commercial results. Linux Foundation Research produced it in collaboration with the Commercial Open Source Startup Alliance (COSSA) and Serena. The named authors are Sam Boysel of The Linux Foundation, Matthieu Lavergne of Serena, and Matt Trifiro of COSSA. The Linux Foundation published its release on 25 August 2025.
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The report focuses on venture-backed startups, with the official summary saying its findings are especially pronounced in infrastructure software. It considers funding, funding speed, liquidity outcomes, and exit valuations, alongside indicators of community health.
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What data and time periods does the report cover?
The report uses two datasets with different observation windows. The financial dataset tracks more than 800 VC-backed COSS companies globally from 2000 through 2024. The separate community dataset covers public GitHub repositories managed by companies in that sample from June 2022 through May 2025—nearly three years, not the full 25-year financial period. The Linux Foundation describes both windows in its 2025 release.
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For community indicators, the report used OpenSSF’s Criticality Score. This makes community health a measured factor in the analysis, but it does not by itself establish that a healthier community produces a particular financial outcome.
What are the headline findings?
The Linux Foundation’s 2025 release reports the following headline figures and comparisons:
| Measure | Reported finding | How to read it |
|---|---|---|
| Aggregate COSS startup funding | $26.4 billion in 2024 | The report’s total for COSS startup funding in that year; it is not a per-company average. |
| Average IPO valuation | 7x greater for COSS startups than for closed-source peers | A reported average comparison, not a prediction for an individual startup. |
| Average M&A valuation | 14x greater for COSS startups than for closed-source peers | A reported average comparison for mergers and acquisitions. |
The Foundation’s summary also says strong community health is “closely linked to higher company valuations.” This is an association reported by the study, not proof that community health caused higher valuations. The summary describes differences in funding speed and liquidity outcomes as well, but the detailed subgroup estimates are not stated in the public material cited here.
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Does commercial open source outperform closed-source companies?
The report’s headline averages favor COSS startups for IPO and M&A valuations relative to closed-source peers. That supports a qualified answer: in the report’s comparisons, COSS companies had higher average valuations at those exit types. It does not establish that all COSS companies outperform all proprietary software companies.
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The release does not provide enough detail to assess how peers were matched, how valuations were normalized, the composition of subgroups, or the statistical uncertainty around the estimates. The 7x and 14x figures should therefore be treated as reported averages in this study, not universal multiples or guarantees. The report’s infrastructure emphasis also should not be extended to every software category without detailed subgroup results.
What the community finding does—and does not—show
The report relates public GitHub community indicators, assessed with OpenSSF’s Criticality Score, to company outcomes. Its summary describes strong community health as closely linked with higher valuations. The observation period for those indicators runs from June 2022 to May 2025, while the financial history spans 2000 to 2024.
That difference in time windows matters: the community observations do not cover the entire financial history. The public summary does not establish whether stronger communities lead to stronger valuations, whether successful companies can invest more in community activity, or whether other factors influence both. The finding is useful as an association to investigate, not as a causal recipe for founders or investors.
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The report offers evidence that commercial open source has become a substantial venture-backed business category: the Linux Foundation reports $26.4 billion in aggregate COSS startup funding in 2024, alongside higher average IPO and M&A valuations than closed-source peers in its analysis. It also identifies a relationship between community health and valuation.
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Those findings are most useful as a broad market signal. The published summary does not provide the matching methodology, uncertainty measures, or detailed subgroup tables needed to determine how reliably the averages apply to a particular company, software area, or investment decision.
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