SAN FRANCISCO — The unfold of the coronavirus has meant feast or famine for know-how start-ups. While many are cutting staff and slashing costs as they reel from the outbreak’s fallout, others have skilled a surge in demand.
One of the fortunate ones is Notion, a office productiveness start-up primarily based in San Francisco, whose instruments assist folks set up and monitor their work. With extra folks working remotely now and turning to such merchandise, new buyer sign-ups hit a brand new excessive for Notion in current weeks.
That allowed the start-up to garner new funding. On Wednesday, Notion stated it raised $50 million from Index Ventures and different buyers that valued it at $2 billion. Notion had beforehand been valued at $800 million.
The fund-raising was accomplished in 36 hours final week after the virus pushed Ivan Zhao, Notion’s founder and chief govt, and Akshay Kothari, Notion’s chief working officer, to rethink their earlier place of not relying too much on venture capital.
In a second of uncertainty, Mr. Kothari stated, “financing is a signal of stability, which is important for us.”
So they known as Sarah Cannon, an investor at Index Ventures who had been courting Notion for over a 12 months. “When the world changed, they changed their mind,” she stated.
Notion is emblematic of the sort of know-how start-up which may be in a position to survive the shakeout in Silicon Valley. Its instruments assist workplace employees, now quarantined of their houses, work collectively extra seamlessly. Notion can be worthwhile.
Before the newest funding, Notion, which was based in 2013, had raised $17 million. The firm declined to reveal its income, however stated it had made cash since 2018.
Notion’s stark black-and-white product presents “templates” of checklists and initiatives for, say, bringing on new hires, monitoring product growth, or managing editorial calendars for entrepreneurs. People use Notion in place of note-taking apps, collaboration providers or writing software program, they usually pay a month-to-month payment of $four to $20 every for additional options like extra safety and storage.
Ram Shriram, a enterprise capitalist who invested in Notion in 2013, stated that at many companies, “a lot of the products we use were designed in the 1990s.” There is room for brand new office instruments that take benefit of the web and different advances so folks can collaborate and have essentially the most up-to-date information whereas they work, he stated.
Mr. Zhao began Notion after graduating from the University of British Columbia and dealing at Inkling, a document-sharing start-up in San Francisco. He initially raised $2 million, which he spent on growing a product over a number of years.
At one level, Notion ran dangerously low on money and laid off 4 workers. In 2016, Mr. Zhao borrowed $150,000 from his mom to maintain the start-up afloat.
The tide turned that very same 12 months when Mr. Zhao launched Notion’s software program product. It shortly caught on amongst techies and early adopters at corporations like Samsung and Hearst.
At MetaLab, a 140-person design company in Vancouver, Notion has now changed 12 completely different instruments, together with Google Slides and Trello, a list-making service. MetaLab stated it used Notion to current work to purchasers and to gather their suggestions multi function place, amongst different duties.
“It’s not trying to be everything to everyone,” Justin Watt, MetaLab’s director of operations and advertising and marketing, stated of the software program. “The killer feature is that it is what you make of it.”
That traction attracted enterprise capitalists and others who needed to spend money on Notion final 12 months. But Shana Fisher, an investor at Third Kind Venture Capital who had earlier backed the start-up, cautioned Mr. Zhao about elevating an excessive amount of capital as a result of it could possibly be distracting.
Notion has customers in international locations together with Russia, Japan and Germany. Since final May, its customers have organized greater than 180 meet-ups in 21 international locations and 52 cities.
By early final 12 months, Notion had practically a million customers. That has since quadrupled, Mr. Kothari stated.
The firm has stayed small, with 42 workers. People wanting to work there have gone to shocking lengths for consideration — one just lately despatched a package deal of cupcakes embellished along with his personal face and the phrases “Hire me!”
Mr. Zhao stated he was cautious of bloat slowing the start-up down and degrading the standard of its product.
“‘Moby Dick’ is written by one person,” he stated. “Adding another person doesn’t necessarily give you a higher-quality ‘Moby Dick.’ It doesn’t even necessarily make it faster.”
The start-up is now in a tough stage of constructing on its development with extra established prospects. Last 12 months, Notion expanded its service to bigger company purchasers, who usually want armies of gross sales representatives and who negotiate difficult contracts.
Notion has employed seven salespeople, who won’t be able to go to purchasers in particular person whereas social distancing is in impact. It can be constructing new options into its software program — like choices for dictating who can entry and edit paperwork — to fulfill bigger corporations’ authorized, safety and compliance necessities.
Mr. Kothari stated Notion might have simply raised greater than $50 million, however that quantity offers the corporate no less than 10 years of financing to function.
“Ten years is enough,” Mr. Zhao stated.