Kitematic (formerly local startup Kite) announced Thursday that it has been acquired by Docker, a cloud-based development platform.

The acquisition was made for undisclosed amount, with the Kitematic team settling down in San Francisco.

Kitematic automates the typically manual effort of deploying and managing Docker environments, an open platform used by developers and system administrators to build, ship and run distributed applications.

Kitematic, a Velocity Fund winner, started in July 2013 to solve the problem of spinning up developer environments in a short amount of time – such as weekend hackathons.

“They started selling this to developers and it turned out that the developers… weren’t willing to pay for it,” said Mike Kirkup, Director of the University of Waterloo’s Velocity program.

Co-founders Jeff Morgan, Michael Chiang and Sean Li went back to the drawing board and pivoted.

They created a turnkey tool for companies to create a quick-demo environment to showcase products to customers.

Although they were gaining traction, it wasn’t taking them where they wanted to go.

“They went back closer to the original idea and they said, “Well, what is the actual problem around setting up environments?,” Kirkup said.

At the same time, things were changing in the virtual environment market, with companies such as Docker building a large user base with its open-source system.

Kitematic saw the opportunity in the market to create an easier user experience for Docker users on Mac.

This solution got the attention of Lightspeed Venture Partners and ultimately earned an acceptance into Lightspeed’s own accelerator for the summer 2014 term.

After the summer program wrapped up, Kitematic stayed in the Valley looking for investment.

Although they met with great investors, “They had a meeting with Docker and they made them a deal,” Kirkup said.

Kitematic will continue to be its own unit within Docker.

“Docker is a great fit on multiple levels, not just culturally and technologically, but also in terms of the business and where they were going,” Kirkup said.

With Kitematic moving to the Valley, the acquisition is bittersweet for the local tech community.

But, said Kirkup: “It continues to build the brand of Waterloo and Waterloo startups in the Bay area. And the guys are fantastic and they are going to be down there to help the next set of people who need help and support.”

Photo: (From left to right)  Fitz (The Whip) Vanderpool, Jeff Morgan, Michael Chiang and Sean Li at Startup Smackdown, at the Kitchener Market, September 2013.