Cloud infrastructure vendors offer a range of prices for their services including aggressively priced virtual machines available on the spot market on an as-available basis. The catch is that the vendor can shut down these VMs whenever they happen to need them. Spotinst, a Tel Aviv-based startup, developed a service to buy and distribute that available excess capacity.
Today, the company announced it was offering this same type of service for serverless computing services like AWS Lambda, which only charge you when a trigger event occurs. They are calling this Function as a Service, and are aiming it at IoT kinds of applications.
This means you don’t pay for having server available 24/7, but only those times that your application requires it. Spotinst says it can deliver event-driven computing resources for a cheaper price than the big vendors charge using the same available server capacity.
While this excess capacity is cheap, it doesn’t come with any type of Service Level Agreement. Spotinst uses its know-how to give you this spot pricing with an SLA.
Regardless of how you purchase your infrastructure services, you may rightly wonder if Spotinst can get this excess capacity, why can’t anyone? Well, the answer is that they could, but because this computing is volatile, Spotinst does more than simply deliver the service to you. It has algorithms working behind the scenes to understand the cloud service capacity usage patterns. This helps it understand when that capacity is going away, and when it needs to move your workloads to another set of available resources.
That’s not easy to do and it’s something people will pay for. In fact, the company is just 2.5 years old, but i, has raised over $17 million and has over 1000 customers. Spotinst was profitable after just six months of operation, according to Amiram Shachar, company founder and CEO.
Up until recently the company stuck with the big three — AWS, Azure and Google Cloud — but as it moves to a serverless product, it has forged partnerships with Alibaba, IBM and Equinix too, giving customers a wide range of choices. If per chance that customer wants capacity from a certain vendor in a certain country or region, Spotinst can accommodate that kind of request too, although as you string together requirements, the cost of delivery goes up.
Disrupt 2026: The tech ecosystem, all in one room
Your next round. Your next hire. Your next breakout opportunity. Find it at TechCrunch Disrupt 2026, where 10,000+ founders, investors, and tech leaders gather for three days of 250+ tactical sessions, powerful introductions, and market-defining innovation. Register now to save up to $400.
Save up to $300 or 30% to TechCrunch Founder Summit
1,000+ founders and investors come together at TechCrunch Founder Summit 2026 for a full day focused on growth, execution, and real-world scaling. Learn from founders and investors who have shaped the industry. Connect with peers navigating similar growth stages. Walk away with tactics you can apply immediately
Offer ends March 13.
They have had some success with VMs and containers using this approach, and now they want to try their hand at serverless computing. Shachar believes it’s the next logical step.
“We saw a great opportunity to get better rates on network and hardware, and we started to shift customers from AWS to other data centers that are close to AWS that leverage function as a service business,” Shachar explained.
