I also love Fly, but they were missing easy managed databases (which always seemed like the main reason to use Heroku to me). And now they have them they're very expensive (even compared to Heroku). Which is a shame because their compute is very cheap.
We're doing Managed Postgres now (MPG), which is what we should have done to begin with, but it took us for-ev-er to get here.
To my understanding there was a runway-growth problem. Could the founders raise and spend (efficiently) enough money quickly enough to keep the business viable? It would be a big gamble and the alternatives were to shut down (no way!) or sell. So they sold.
Rackspace wanted to take Matt’s and Jason’s know how (plus customer base) and go big, really big! That defocused our efforts a bit, plus there were corporate integration headaches (though not too bad). Eventually Linode, already a competitor, and later Digital Ocean filled the void.
I remember being excited by the merger because well, Rackspace had such a fantastic reputation at the time. People still tell stories about their service. The Rackspace Cloud was just up against an absolute monster in AWS and never really became competitive.