Monday.com, a team-focused task management tool, raised new capital today. The firm’s fresh $150 million Series D values it at $1.9 billion, a multiple of its preceding $550 million post-money valuation set during its mid-2018 Series C.
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The SaaS company nearly quadrupled its valuation in about a year; that pace of value creation is abnormal, though possible in the current climate for companies with strong revenue growth, sturdy SaaS metrics (retention, etc), and winsome gross margins. I presume that Monday.com has all three, given the scale, timing, and valuation of its new round.
Sapphire Ventures led Monday.com’s new Series D, its first known investment into the company. The startup’s preceding rounds, a $50 million 2018 Series C, a $25 million 2017 Series B, a $7.6 million 2015 Series A, and a $1.5 million 2012 Seed round, came from Stripes Group, Insight Partners, Entrée Capital, and Genesis Partners, according to Crunchbase data.
How did Monday.com raise so much money so quickly? We have a hint via Forbes’ writeup of the round:
Monday’s valuation of $1.9 billion came as the company grew its annualized revenue from $18 million to $50 million in 2018, and to an anticipated $120 million this year, all while more than doubling its customer base. “From a revenue and growth perspective, it’s quite a unique asset,” [Sapphire Ventures’ Nino] Marakovic says.
This confirms our prior guess concerning revenue growth at a minimum.
If Monday.com can get to $120 million in ARR by the end of 2019, the company will have IPO-ready revenue and impressive growth to add sizzle to its S-1 season. Provided that it isn’t setting fire to great bales of money, the company could go public in 2020 without too much fuss.
Which brings us to another public debut, namely Slack’s own. Slack and Monday.com work in similar, if different categories. While Slack is famous for its work chat tool, Monday is more focused on project tracking. But each is working to help modern workers better communicate and organize. And Slack has received a hero’s welcome from the public markets.
You can see evidence of that fact in Slack’s current revenue (ARR) multiple, which is around 30x depending on how you want to calculate the figure. If Monday.com can get even half of that, the company will grow into its new valuation by the end of 2019. By mid-2020 the $1.9 billion price tag could look cheap if it keeps expanding as it is now.
Don’t count revenue before the checks land, of course. And don’t forget about the costs thereof; I’ve seen more Monday.com ads in the last month than I have ever before, implying (I think) that the firm is spending to help itself grow. That is no sin provided that its ROAS (return on ad spend) is where it needs to be. (I was worried about Zoom’s own S&M spend until it turned out it was profitable, so I don’t want to throw stones without data in this case.)
Summing, Monday.com has a bunch of new money and a fresh new valuation. It’s a big win for the Israeli startup scene, and a win for the company itself. Now Monday.com needs to measure up to new, higher expectations. Expect to see more Monday.com ads.
Featured image by Dom Guzman.