Digital Whiteboard Trello Spins Out of Fog Creek With $10.3M
For the second time, Fog Creek Software Inc. has spun out a company—Trello Inc., an internal project management tool that became so popular, according to the founders, it needed to exist on its own.
Context & Ripple Effects
Fog Creek Software has form here: Trello is the company's second spinout, following the playbook of taking an internally built product that outgrew its parent and giving it its own balance sheet. The $10.3M raise makes Trello Inc. an independent company rather than a Fog Creek product line.
The story traveled unusually wide on day one — pickups from TechCrunch and VentureBeat alongside posts from Joel Spolsky himself and investor Bijan Sabet — which reads as the investor and founder community treating the spinout as a template worth watching, not just another Series A.
First-order effects
- Trello Inc. now operates as a standalone company with $10.3M to fund growth independently of Fog Creek's other businesses.
- Fog Creek loses its fastest-growing product but gains a focused portfolio, having now executed this separation twice.
Second-order effects
- The broad same-day pickup — including a post from investor Bijan Sabet — signals that VCs are watching the internal-tool-spinout model, raising the odds other incubated products get similar carve-outs rather than staying inside their parents.
- With dedicated funding, Trello can invest in sales and platform work that a side project inside Fog Creek never justified, putting direct pressure on the paid team-collaboration tools it overlaps with.
Third-order effects
- If internal tools keep graduating into funded companies, the incubator model — building many products and spinning out the winners — becomes a repeatable company-creation strategy rather than a one-off, reshaping how small software firms allocate talent between core products and experiments.
The trend: Software companies are increasingly carving out internally grown tools into venture-funded independents when usage outstrips the parent's focus, turning product incubation into a deliberate spinout pipeline.