SAN FRANCISCO — The unfold of the coronavirus has meant feast or famine for expertise start-ups. Whereas many are cutting staff and slashing costs as they reel from the outbreak’s fallout, others have skilled a surge in demand.
One of many fortunate ones is Notion, a office productiveness start-up primarily based in San Francisco, whose instruments assist individuals manage and monitor their work. With extra individuals 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 mentioned it raised $50 million from Index Ventures and different traders 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 mentioned, “financing is a sign of stability, which is necessary for us.”
So that they referred to as Sarah Cannon, an investor at Index Ventures who had been courting Notion for over a yr. “When the world modified, they modified their thoughts,” she mentioned.
Notion is emblematic of the type of expertise start-up which may be in a position to survive the shakeout in Silicon Valley. Its instruments assist workplace employees, now quarantined of their properties, work collectively extra seamlessly. Notion can be worthwhile.
Earlier than the latest funding, Notion, which was based in 2013, had raised $17 million. The corporate declined to reveal its income, however mentioned it had made cash since 2018.
Notion’s stark black-and-white product affords “templates” of checklists and tasks for, say, bringing on new hires, monitoring product growth, or managing editorial calendars for entrepreneurs. Individuals use Notion rather than note-taking apps, collaboration providers or writing software program, and so they pay a month-to-month charge of $four to $20 every for additional options like extra safety and storage.
Ram Shriram, a enterprise capitalist who invested in Notion in 2013, mentioned that at many companies, “numerous the merchandise we use had been designed within the 1990s.” There may be room for brand new office instruments that benefit from the web and different advances so individuals can collaborate and have essentially the most up-to-date information whereas they work, he mentioned.
Mr. Zhao began Notion after graduating from the College of British Columbia and dealing at Inkling, a document-sharing start-up in San Francisco. He initially raised $2 million, which he spent on creating 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 yr when Mr. Zhao launched Notion’s software program product. It shortly caught on amongst techies and early adopters at firms 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 mentioned it used Notion to current work to shoppers and to gather their suggestions multi function place, amongst different duties.
“It’s not attempting to be all the pieces to everybody,” Justin Watt, MetaLab’s director of operations and advertising, mentioned of the software program. “The killer characteristic is that it’s what you make of it.”
That traction attracted enterprise capitalists and others who wished to spend money on Notion final yr. However Shana Fisher, an investor at Third Form Enterprise Capital who had earlier backed the start-up, cautioned Mr. Zhao about elevating an excessive amount of capital as a result of it might be distracting.
Notion has customers in international locations together with Russia, Japan and Germany. Since final Could, its customers have organized greater than 180 meet-ups in 21 international locations and 52 cities.
By early final yr, Notion had almost a million customers. That has since quadrupled, Mr. Kothari mentioned.
The corporate has stayed small, with 42 workers. Individuals desirous to work there have gone to stunning lengths for consideration — one lately despatched a package deal of cupcakes adorned along with his personal face and the phrases “Rent me!”
Mr. Zhao mentioned he was cautious of bloat slowing the start-up down and degrading the standard of its product.
“‘Moby Dick’ is written by one individual,” he mentioned. “Including one other individual doesn’t essentially offer you a higher-quality ‘Moby Dick.’ It doesn’t even essentially make it sooner.”
The beginning-up is now in a difficult stage of constructing on its progress with extra established prospects. Final yr, Notion expanded its service to bigger company shoppers, who usually want armies of gross sales representatives and who negotiate difficult contracts.
Notion has employed seven salespeople, who will be unable to go to shoppers in individual whereas social distancing is in impact. It’s also constructing new options into its software program — like choices for dictating who can entry and edit paperwork — to fulfill bigger firms’ authorized, safety and compliance necessities.
Mr. Kothari mentioned Notion might have simply raised greater than $50 million, however that quantity offers the corporate at the least 10 years of financing to function.
“Ten years is sufficient,” Mr. Zhao mentioned.