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DataRails books $25M more to build better financial reporting tools for SMBs
As enterprise startups continue to target interesting gaps in the market, we’re seeing increasingly sophisticated tools getting built for small and medium businesses — traditionally a tricky segment to sell to, too small for large enterprise tools, and too advanced in their needs for consumer products. In the latest development of that trend, an Israeli startup called DataRails has raised $25 million to continue building out a platform that lets SMBs use Excel to run financial planning and analytics like their larger counterparts.
The funding closes out the company’s Series A at $43.5 million, after the company initially raised $18.5 million in April (some at the time reported this as its Series A, but it seems the round had yet to be completed). The full round includes Zeev Ventures, Vertex Ventures Israel and Innovation Endeavors, with Vintage Investment Partners added in this most recent tranche. DataRails is not disclosing its valuation, except to note that it has doubled in the last four months, with hundreds of customers and on target to cross 1,000 this year, with a focus on the North American market. It has raised $55 million in total.
The challenge that DataRails has identified is that on one hand, SMBs have started to adopt a lot more apps, including software delivered as a service, to help them manage their businesses — a trend that has been accelerated in the last year with the pandemic and the knock-on effect that has had for remote working and bringing more virtual elements to replace face-to-face interactions. Those apps can include Salesforce, NetSuite, Sage, SAP, QuickBooks, Zuora, Xero, ADP and more.
But on the other hand, those in the business who manage finances and financial reporting are lacking the tools to look at the data from these different apps in a holistic way. While Excel is a default application for many of them, they are simply reading lots of individual spreadsheets rather than integrated data analytics based on the numbers.
DataRails has built a platform that can read the reported information, which typically already lives in Excel spreadsheets, and automatically translate it into a bigger picture view of the company.
For SMEs, Excel is such a central piece of software, yet such a pain point for its lack of extensibility and function, that this predicament was actually the germination of starting DataRails in the first place,
Didi Gurfinkel, the CEO who co-founded the company with Eyal Cohen (the CPO) said that DataRails initially set out to create a more general-purpose product that could help analyze and visualize anything from Excel.
Image: DataRails
“We started the company with a vision to save the world from Excel spreadsheets,” he said, by taking them and helping to connect the data contained within them to a structured database. “The core of our technology knows how to take unstructured data and map that to a central database.” Before 2020, DataRails (which was founded in 2015) applied this to a variety of areas with a focus on banks, insurance companies, compliance and data integrity.
Over time, it could see a very specific application emerging, specifically for SMEs: providing a platform for FP&A (financial planning and analytics), which didn’t really have a solution to address it at the time. “So we enabled that to beat the market.”
“They’re already investing so much time and money in their software, but they still don’t have analytics and insight,” said Gurfinkel.
That turned out to be fortunate timing, since “digital transformation” and getting more out of one’s data was really starting to get traction in the world of business, specifically in the world of SMEs, and CFOs and other people who oversaw finances were already looking for something like this.
The typical DataRails customer might be as small as a business of 50 people, or as big as 1,000 employees, a size of business that is too small for enterprise solutions, “which can cost tens of thousands of dollars to implement and use,” added Cohen, among other challenges. But as with so many of the apps that are being built today to address those using Excel, the idea with DataRails is low-code or even more specifically no-code, which means “no IT in the loop,” he said.
“That’s why we are so successful,” he said. “We are crossing the barrier and making our solution easy to use.”
The company doesn’t have a huge number of competitors today, either, although companies like Cube (which also recently raised some money) are among them. And others like Stripe, while currently not focusing on FP&A, have most definitely been expanding the tools that it is providing to businesses as part of their bigger play to manage payments and subsequently other processes related to financial activity, so perhaps it, or others like it, might at some point become competitors in this space as well.
In the meantime, Gurfinkel said that other areas that DataRails is likely to expand to cover alongside FP&A include HR, inventory and “planning for anything,” any process that you have running in Excel. Another interesting turn would be how and if DataRails decides to look beyond Excel at other spreadsheets, or bypass spreadsheets altogether.
The scope of the opportunity — in the U.S. alone there are more than 30 million small businesses — is what’s attracting the investment here.
“We’re thrilled to reinvest in DataRails and continue working with the team to help them navigate their recent explosive and rapid growth,” said Yanai Oron, general partner at Vertex Ventures, in a statement. “With innovative yet accessible technology and a tremendous untapped market opportunity, DataRails is primed to scale and become the leading FP&A solution for SMEs everywhere.”
“Businesses are constantly about to start, in the midst of, or have just finished a round of financial reporting — it’s a never-ending cycle,” added Oren Zeev, founding partner at Zeev Ventures. “But with DataRails, FP&A can be simple, streamlined, and effective, and that’s a vision we’ll back again and again.”
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Fast growth pushes an unprofitable no-code startup into the public markets: Inside Monday.com’s IPO filing
At long last, the Monday.com crew dropped an F-1 filing to go public in the United States. TechCrunch has long known that the company, which sells corporate productivity and communications software, has scaled north of $100 million in annual recurring revenue (ARR).
The countdown to its IPO filing — an F-1, because the company is based in Israel, rather than the S-1s filed by domestic companies — has been ticking for several quarters, so seeing Monday.com drop the document on this Monday morning was just good fun.
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The Exchange has been riffling through the document since it came out, and we’ve picked up on a few things to explore. We’ll start by looking at the company’s revenue growth on a historical basis to see if it has accelerated in recent quarters thanks to the pandemic. Then, we’ll turn to profitability, cash burn, share-based compensation expenses and product vision.
We’ll wrap at the end with a summary of what we’ve learned and also make sure to check out the company’s marketing spend, because I’m sure you’ve seen its digital ads.
It’s a lot to chew through, so no more dilly-dallying. Into the numbers!
As always, we’re starting with revenue growth because it’s still the single most important thing about any venture-backed company.
Revenue adds are accelerating
This is great news for the startup, its employees and its investors. From 2019 to 2020, Monday.com grew its revenues from $78.1 million to $161.1 million, or 106%.
From Q1 2020 to Q1 2021, the company’s revenues grew from $31.9 million to $59 million. That’s about 85% growth. So, by what measure do we mean that the company’s revenue growth is accelerating? Its sequential-quarter revenue growth is picking up. Observe the following:
Image Credits: Monday.com F-1 filing
From Q2 2019 to Q3 2019, the company added around $4 million in revenue. From Q2 2020 to Q3 2020, that number was $6.1 million. More recently, the company’s revenue added $7.6 million from Q3 2020 to Q4 2020, which accelerated to $8.8 million from the final quarter of 2020 to the first quarter of 2021. Of course, from an ever-larger base, the company’s growth rate may decline. But the super clean and obvious expanding sequential revenue gains at the company are solid.
The fact that it added so much top line in recent quarters also helps explain why Monday.com is going public now. Sure, the markets are still near record highs and the pandemic is fading, but just look at that consistent growth! It’s investor catnip.
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Don’t hate on low-code and no-code
As far as I can tell, low-code and no-code services are rapidly proving that prior models for products as broad as enterprise app creation and AI-powered data analytics were lackluster. My evidence? A mix of public- and private-market low- and no-code companies are putting up impressive results.
The Exchange caught up with Appian CEO Matt Calkins after his enterprise app software company reported its first-quarter performance to discuss the low-code market and what he’s hearing in customer meetings. To round out our general thesis — and shore up our somewhat bratty headline — we’ve compiled a list of recent low-code and no-code venture capital rounds, of which there are many.
As we’ll show, the pace at which venture capitalists are putting funds into companies that fall into our two categories is pretty damn rapid, which implies that they are doing well as a cohort. We can infer as much because it has become clear in recent quarters that while today’s private capital market is stupendous for some startups, it’s harder than you’d think for others.
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The dividing factor? Signs of impressive present-day traction: Startups that are growing very fast have nearly unlimited access to capital, while those that are growing at merely fast rates are often finding it difficult to find a dance partner.
So if we can show that a huge, diverse set of no-code and low-code startups are raising oodles of capital, we can infer something relatively sturdy about market demand for their products. (It also doesn’t hurt that no-code automation service Zapier is growing like a weed and has reached IPO scale. In other news, Appian just dropped a new version of its low-code automation platform, for whatever that is worth.)
First Appian’s CEO, then a venture capital roundup. This should be fun.
Public performance
Briefly, Appian reported $88.9 million in Q1 2021 revenue, of which $39.1 million came from its cloud subscription business. The latter figure rose 38% in the quarter compared to the year-ago period. Appian also swung to adjusted EBITDA profit in the period. Investors responded by hammering the company’s stock in the wake of the results. From an April share-price range in the mid-$130s, Appian is now trading in the mid-$80s, though only some of those declines came post-earnings.
But the company’s stock price is only so important. Precisely how conservative any one public company’s guidance is for the current year and how those forecasts play with investor expectations during a period of generally excessive valuations is not our game. What does matter is what the company’s CEO had to say about the low-code space itself.
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Salesforce is bringing drag and drop interactive components to its low-code toolkit
Low-code and no-code tools abound these days, as the industry attempts to give nontechnical end users the ability to create applications without code (or very little anyway). Salesforce has been a big proponent of this approach to help reduce the complexity of working on its platform, and today the CRM giant announced a new wrinkle: drag and drop interactive components.
These new components allow users to create more sophisticated kinds of interactions, says Ryan Ellis, SVP for product management and platform at Salesforce. “We’re introducing this new feature called Dynamic Interactions and prior to their existence you had to have developers if you wanted to be able to build essentially truly interactive applications,” Ellis said.
What he means by this is if you have an application made up of multiple components such as a list of companies, a map and information about the company. You can click a company name and its location instantly appears on the map, and information about the company appears alongside it.
Salesforce will be providing about 150 such interactions like maps, lists, Einstein next best action and so forth. Developers can also create these for users as reusable building blocks that make sense to your organization or make them available in the AppExchange for others to use. Finally, you might have a systems integrator or consultant help build them for you.
“With dynamic interactions, we’re really dramatically simplifying the process of building apps with components that communicate with each other, pass data back and forth and react to user actions. It’s an entirely no-code tool so that developers write the code once for their component, and then that component can be reused by people who don’t have technical skills by dragging and dropping them onto the page, then configuring what should happen when a user takes an action,” Ellis explained.
Image Credits: Salesforce
He says that this is part of a larger trend of digital transformation happening across the industry, one that was accelerated by the pandemic, something we hear frequently from tech companies like Salesforce.
“There’s really this big push to go digital faster than ever before, and this was happening for years as we were seeing businesses having to pivot much more rapidly as new business models were coming about. […] But then in this last year COVID really changed the game, and people just had to put on full gas in terms of actually being able to deliver those digital transformations in some instances overnight,” he said.
When you combine that with a shortage of developers, it makes sense that Salesforce and many other companies in the industry are developing these low-code tools that allow nontechnical business users to build some applications themselves, while freeing developers to concentrate on more sophisticated organizational requirements.
Dynamic Interactions will be available starting today from Salesforce (in beta). The product is expected to be generally available around Dreamforce in the fall.
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n8n raises $12M for its ‘fair code’ approach to low-code workflow automation
As businesses continue to look for better ways to work more efficiently, a pioneer in the space of low-code tools to help automate how apps work together is announcing a round of funding on the back of impressive early traction.
Berlin-based n8n — which provides a framework for both technical and non-technical people to synchronize and integrate data and workflows — has raised $12 million in a Series A round of funding.
The startup plans to use the money to continue expanding its team, which now numbers 60 people, and to expand its platform and the services it provides to users.
Currently, n8n can help link up and integrate data and functions between more than 200 established applications, as well as any custom apps or services that you might be using in your specific organization. And since launching in October 2019, the startup has picked up an impressive 16,000 users — including both developers and “citizen developers” (those whose jobs might be described as non-technical but they are not afraid to be more hands-on in trying to build in ways to work better).
Now it wants to make the service easier for more of the latter group to get stuck in with using it.
“We are still seen as a technical product and less of one for citizen developers,” founder and CEO Jan Oberhauser said in an interview. “Our plan is to make n8n simpler to use, so that it’s much easier to adopt. We want to give everyone technical superpowers, whether it’s the marketing team or the IT department.” That means for example building not just chatbots but more intelligent ones, or creating new ways of visualizing data in Slack or something else altogether. And n8n’s platform can also be used to build automation within products, for example to monitor performance and flag when something might need maintenance.
The round is being led by Felicis Ventures, with Sequoia Capital, firstminute Capital and Harpoon Ventures also participating. Sequoia and firstminute co-led n8n’s seed round about a year ago, which also included participation from Eventbrite’s Kevin Hartz, Supercell’s Ilkka Paananen and unnamed early employees of Google and Zendesk, among others. The startup has now raised around $14 million and is not disclosing valuation.
There are a number of low-code and no-code startups on the market today and many of them have been seeing a surge of in interest in the last year. It’s a trend I suspect was brought about in no small part by the arrival of COVID-19.
The pandemic not only led to more people working remotely and relying on apps and other cloud-based services to get what they needed to do done, but in many cases it led organizations to refocus on how they were working, and what could be improved. In some cases, it also has meant a severe tightening of belts, and so companies are needing to do more with less human power, another factor leading to more proactive efforts to use software to get more out of… software.
That’s meant more strain on IT teams, and that too has led to more people within departments themselves getting proactive in improving their own workflows.
Other startups in the space include Bryter (which raised a $66 million Series B earlier this month) and Genesis (which raised $45 million in March), along with Zapier, Airtable, Rows, Gyana, Ushur, Creatio, EasySend and CapivateIQ, some of which are coming to the market with a variety of solutions targeting a set of generic tools, while others are building solutions for more narrow use cases.
In the case of n8n, the company might be considered a “pioneer” in the space not just because of its focus on the growing area of low-code tools, but because of how it views the world of software.
The basic approach n8n is taking is around the idea of “fair code.” This is somewhat similar to open-source, and is analogous to a freemium-style model for the concept. The code is available in a public repository and the idea is that this will never disappear (one issue many enterprises face on the bleeding edge of tech: companies and their services sometimes shut down). However, n8n itself limits how much it can be used for free, before users start to pay to use it so that n8n can monetize its work, which it does in the form of consulting and integration services. (In the case of n8n, that limit looks to be up to a limit of $30,000 in support services revenues.)
Oberhauser was an early proponent of the concept of n8n and he runs a site dedicated to spreading the word. (You can also read about the different approaches to fair code, and some of what led to the creation of the concept, here.)
While basic and limited access to the code will remain free, and even as a company like n8n aims to make it easier and easier for non-developers to build integrations, there will be areas that need attention to make those services accessible to the people within an organization. For starters, there is the issue of setting up the basic integration connectors, especially in cases where the software a company is using is proprietary or customized.
There is also another issue that is likely to become more prominent as low-code and no-code tools continue to grow in popularity, and that is security. While IT departments may not have oversight of every single integration, neither will the security teams, which means that new data vulnerabilities might well become more commonplace, too. For all of these reasons, n8n is betting that there will still be some integration and consulting involved in implementation.
“Almost every company needs help connecting outside and internal systems, to make it easier for people to get started,” Oberhauser said.
Aydin Senkut, founder and managing partner of Felicis Ventures, who led the round, said that what attracted him to n8n was the extensibility of the platform — that it could be applied not just for app integration and workflow automation in those apps but a much wider set of use cases — and the very early traction of 16,000 users that it’s picked up with very little fanfare, a sign that the service has some stickiness and usefulness to it.
And the fact that it lets developers — “citizen” or otherwise — play with so many options is also a key part of it.
“We feel that data is the new oil, and one of the special things here is not just low or no-code per se, but how n8n is making it seamless and easy to connect tens or even hundreds of apps.” Senkut said that it reminded him a little of Felicis’ early investment in Plaid. “Essentially, the more data and APIs you have the more valuable the company can be. I think to measure the potential of a company, look at the APIs. If you can connect disparate things together, that is key.”
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Time-strapped IT teams can use low-code software to drive quick growth
Many emerging and mature organizations survive or die based on their ability to scale. Scale quicker. Scale cheaper. Scale right.
Typically the IT team bears that burden — on top of countless other demands. IT teams move mountains for their organizations while scaling the tech platform as fast as possible, putting out the latest infrastructure fire and responding to countless day-to-day requests.
The most helpful gift any chief information officer or chief technology officer can give their IT teams is more time. Many people think that means adding another team member. Maybe it does in some cases (if you can find a developer in this tough job market), but giving my team Boomi’s low-code integration platform was one of the best strategic moves for HealthBridge.
The best time to use low-code is when you need to add something to your organization that isn’t unique or doesn’t drive significant business value.
As the least skilled coder on the team, low-code let me develop and deliver four customer-centric self-service portals a year ahead of schedule while my team focused on building and scaling our revenue-driving, custom platform by hand-writing code.
Low-code is quickly becoming commonplace and a popular topic among IT decision-makers. Over the last few years, the market has exploded. Gartner expects it to total $13.8 billion in 2021. That means low-code technology, which we’ve been hearing about for years, is ready for widespread adoption. Today, low-code enables you to streamline (and scale) everything from integration to artificial intelligence.
It’s a secret only some organizations are clued in on, but it’s a great way to scale fast, save on resources and give your team more time. Here’s how.
When to use low-code and when to write code
The best time to use low-code is when you need to add something to your organization that isn’t unique or doesn’t drive significant business value.
For instance, a customer portal is not unique; don’t waste time hand-coding it.
While it’s certainly an extremely helpful feature for our customers, it’s unlikely to drive significant shareholder or investor value. However, it’s key for scaling. Using low-code for a must-have but undifferentiated feature will allow your team to work on more important projects while scaling.
When we started working on the timeline for a customer portal project at HealthBridge, we estimated it would take several sprints per portal to develop, but more pressing development work kept pushing it down the list in our backlog. Waiting a year for a basic feature didn’t seem reasonable to me, so we looked for a workaround.
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Zoho launches new low code workflow automation product
Workflow automation has been one of the key trends this year so far, and Zoho, a company known for its suite of affordable business tools has joined the parade with a new low code workflow product called Qntrl (pronounced control).
Zoho’s Rodrigo Vaca, who is in charge of Qntrl’s marketing says that most of the solutions we’ve been seeing are built for larger enterprise customers. Zoho is aiming for the mid-market with a product that requires less technical expertise than traditional business process management tools.
“We enable customers to design their workflows visually without the need for any particular kind of prior knowledge of business process management notation or any kind of that esoteric modeling or discipline,” Vaca told me.
While Vaca says, Qntrl could require some technical help to connect a workflow to more complex backend systems like CRM or ERP, it allows a less technical end user to drag and drop the components and then get help to finish the rest.
“We certainly expect that when you need to connect to NetSuite or SAP you’re going to need a developer. If nothing else, the IT guys are going to ask questions, and they will need to provide access,” Vaca said.
He believes this product is putting this kind of tooling in reach of companies that may have been left out of workflow automation for the most part, or which have been using spreadsheets or other tools to create crude workflows. With Qntrl, you drag and drop components, and then select each component and configure what happens before, during and after each step.
What’s more, Qntrl provides a central place for processing and understanding what’s happening within each workflow at any given time, and who is responsible for completing it.
We’ve seen bigger companies like Microsoft, SAP, ServiceNow and others offering this type of functionality over the last year as low code workflow automation has taken center stage in business.
This has become a more pronounced need during the pandemic when so many workers could not be in the office. It made moving work in a more automated workflow more imperative, and we have seen companies moving to add more of this kind of functionality as a result.
Brent Leary, principal analyst at CRM Essentials, says that Zoho is attempting to remove some the complexity from this kind of tool.
“It handles the security pieces to make sure the right people have access to the data and processes used in the workflows in the background, so regular users can drag and drop to build their flows and processes without having to worry about that stuff,” Leary told me.
Qntrl is available starting today starting at just $7 per user month.
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Berlin’s Bryter raises $66M to take its no-code tools for enterprises to the US
No-code startups continue to see a lot of traction among enterprises, where employees — strictly speaking, non-technical, but still using software every day — are getting hands-on and building apps to take on some of the more repetitive aspects of their jobs, the so-called “citizen coders” of the working world.
And in one of the latest developments, Bryter — an AI-based no-code startup that has built a platforms used by some 100 global enterprises to date across some 2,000 business applications and workflows — is announcing a new round of funding to double down on that opportunity. The Berlin-based company has closed a Series B of $66 million, money that it will be investing into its platform and expanding in the U.S. out of a New York office it opened last year. The funding comes on the heels of seeing a lot of demand for its tools, CEO and co-founder Michael Grupp said in an interview.
“It was a great year for low-code and no-code platforms,” said Grupp, who co-founded the company with Micha-Manuel Bues and Michael Hübl. “What everyone has realized is that most people don’t actually care about the tech. They only care about the use cases. They want to get things done.” Customers using the service include the likes of McDonald’s, Telefónica, PwC, KPMG and Deloitte in Europe, as well as banks, healthcare and industrial enterprises.
Tiger Global is leading this round, with previous backers Accel, Dawn Capital, Notion Capital and Cavalry Ventures also participating, along with a number of individual backers (they include Amit Agarwal, CPO of Datadog; Lars Björk, former CEO of Qlik; Ulf Zetterberg, founder and CEO of Seal Software; and former ServiceNow global SVP James Fitzgerald). The valuation is not being disclosed; Bryter has raised around $90 million to date.
Accel and Dawn co-led Bryter’s Series A of $16 million less than a year ago, in June 2020, a rapid funding pace that underscores both interest in the no-code/low-code space — Bryter’s enterprise customer base has doubled from 50 since then — and the fact that startups in it are striking while the iron is hot.
Bryter’s not the only one: Airtable, Genesis, Rows, Creatio and Ushur are among the many startups building “hands-on tech creation for non-techie people” that have raised money in the last several months.
Automation has been the bigger trend that has propelled a lot of this activity. Knowledge workers spend most of their time these days in apps — a state of affairs that pre-dates the COVID-19 pandemic, but has definitely been furthered throughout it. While some of that work still requires manual involvement and evaluation from those workers, software has automated large swathes of those jobs.
RPA — robotic process automation, where companies like UiPath, Automation Anywhere and Blue Prism have taken a big lead — has accounted for a significant chunk of that activity, especially when it comes to reading forms and lots of data entry. But there remains a lot of other transactions and activities within specific apps where RPA is typically not used (not yet at least!). And this is where non-tech workers are finding that no-code tools like Bryter, which use artificial intelligence to deliver more personalised, yet scalable, automation, can play a very useful role.
“We sit on top of RPA in many cases,” said Grupp.
The company says that business functions where its platform has been implemented include compliance, legal, tax, privacy and security, procurement, administration and HR, and the kinds of features that are being built include virtual assistants, chatbots, interactive self-service tools and more.
These don’t replace people as such, but cut down the time they need to spend in specific tasks to process and handle information within them, and could in theory also be used to build tools for customers to interact with services more easily, cutting down on the amount of time that agents are getting details and handling engagements.
That scalability and the rapid customer up-take from a pool of users that extends beyond tech early adopters are part of what attracted the funding.
“Bryter has all the characteristics of a top-tier software company: high quality product that solves a real customer pain point, a large market opportunity and a world-class founding team,” said John Curtius, a partner at Tiger Global, in a statement. “The feedback from Bryter’s customers was resoundingly positive in our research, and we are excited to see the company reach new heights over the coming years.”
“Bryter has seen explosive growth over the last year, signing landmark customers across a large number of sectors and use cases. This does not come as a surprise. In the pandemic-affected world, digitalisation is no longer a nice to have, it is an imperative,” added Evgenia Plotnikova, a partner at Dawn Capital.
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Genesis raises $45M to expand its fintech-focussed low-code platform to more verticals
Low-code and no-code tools have been a huge hit with enterprises keen to give their operations more of a tech boost, but often lack the resources to handle more complex integrations. Today, one of the startups that has been building low-code finance tools is announcing funding to tap into that trend and expand its business.
Genesis — which has to date primarily worked with financial services companies, giving non-technical employees the tools to create ways to monitor and manage real-time risk, high-frequency trades and other activities — has picked up $45 million. It plans to use the funding to bring the tools it has already built to a wider set of verticals that have some of the same needs to manage risk, compliance and other factors as finance — healthcare and manufacturing are two examples — as well as to continue building more into the stack.
This Series B includes a mix of financial investors along with strategic backers that speak to who already integrates with Genesis’ tools on their own platforms.
Led by Accel, it also includes participation from new backers GV (formerly Google Ventures) and Salesforce Ventures, in addition to existing investors Citi, Illuminate Financial and Tribeca Venture Partners, who also invested in this round. To give you an idea of who it works with, Citi, ING, London Clearing House and XP Investments are some of Genesis’ customers.
Originally conceived in 2012 in Brazil by a pair of British co-founders — Stephen Murphy (CEO) and James Harrison (CTO), who cut their teeth in the world of investment banking — Genesis had raised less than $5 million before this round, mostly bootstrapping its business and leaning on Murphy and Harrison’s existing relationships in the world of finance to grow its customer base.
Today, Murphy lives in and leads the business from Miami — where he moved from New York just as the COVID-19 pandemic was starting to gain steam last year — while James Harrison (CTO) leads part of the team based out of the U.K.
As you might imagine with so little funding before now for a company going on nine years old, Genesis was doing fine financially before this Series B, so the plan is to use the funding specifically to grow faster than it could have on its own steam. The startup is not disclosing its valuation with this round.
“We were not really fixated on valuation,” said Murphy in an interview, who said the funding came about after a number of VCs had approached the startup. “The most important thing is the future opportunity and where we could take the company with additional funding… this will help us hyper scale up.” He did note that the term sheets contained “some amazing numbers and multiples,” given the current interest in no-code and low-code technology.
Indeed, the vogue for no-code and low-code tech — other well-funded names in the crowded space include startups like Zapier, Airtable, Rows, Gyana, Bryter, Ushur, Creatio and EasySend, as well as significant launches from Google and Microsoft and other bigger players — is coming out of two trends colliding.
On one side, we’ve well and truly entered an era in enterprise technology — with the same trend playing out in consumer tech, too — where smart developers are taking sophisticated and complex services and putting “wrappers” around them by way of APIs and simpler (low- or no-code) interfaces, so that those sophisticated tools can in turn be integrated and implemented in more places. This saves needing to build or integrate that complexity from scratch and expands access to the processes within those wrappers.
On the other side, the thirst for tech knowledge has become well and truly mainstream and as a result is getting far more democratized. Working in a variety of applications, using different digital tools and devices and seeing the fruits of tech pay off are all second nature to today’s working world — whether or not you are a technologist. So it’s no surprise to see more proactive, non-technical people looking for more ways to get their hands on these tools themselves.
“You now have a whole citizen developer world, for example business analysts who understand the solution you want but might not know how to get there,” Murphy said. “We play to seasoned developers first but the investment will help us put more low-code and no-code tools into place to widen the tools out to them.”
Starting out in finance made sense not just because that was where the two founders had previously worked, but also because of the history of how different software tools were already being used. Specifically, he noted that the ubiquity of microservices — which themselves are collections of services as apps — laid the groundwork for more low-code. “We saw that if we could build a low-code entry point to microservices, that would be powerful.”
On top of that, investment banks, he said, have a history of wanting to build things themselves to tailor to their specific needs. “Buying off the shelf means you are at the mercy of the vendor,” he said. These factors made financial services companies very receptive to what Genesis was offering.
While a lot of the no/low-code players are coming at the concept with specific verticals in mind — no surprise, since different verticals have very specific use cases and needs — what’s interesting with Genesis is how the company is leveraging what it already knows about finance, and then looking at other industries that have similar demands, structures and rules.
Murphy said that Genesis will stay “very focused on financial markets for 2021” but that it’s identified a number of other verticals similar to it, and is actually already seeing some inbound interest from them.
“A number of people have already approached us from the world of healthcare,” he said, pointing out that these organizations, like financial services, face challenges around how to audit data and regulations around performing transactions. Manufacturing, meanwhile, has some parallels around the area of complex event processing similar to equity algorithmic trading, he said. (In short, this relates to how external events might trigger more transactions, not unlike how external factors affect manufacturing operations.)
The trend is one that analysts forecast will only grow in the coming years: Gartner, for example, says that by 2024, low-code platforms will account for no less than 65% of all app development activity.
“Low-code promises business users the autonomy to make their own technology usage and purchase decisions while enabling them to actually build their own applications without having to rely on IT,” said Andrei Brasoveanu, a partner at Accel, said in a statement. “By bringing one of the most transformative innovations in software development to financial services, Steve and the Genesis team are taking on a huge market of legacy vendors — and winning too — while delivering on the promise of low-code. The confidence they’ve gained from serving such large institutions is proof that there’s a real and urgent need for a purpose-built low-code solution for financial markets. We’re excited to partner with Genesis and support them in delivering this across the world.” Brasoveanu is joining the startup’s board with this round.
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Zapier buys no-code-focused Makerpad in its first acquisition
Zapier, a well-known no-code automation tool, has purchased Makerpad, a no-code education service and community. Terms of the deal were not disclosed.
TechCrunch has covered Zapier often during its life, including its first, and only, fundraising event, a $1.2 million round back in 2012 that tapped Bessemer, DFJ and others. Since then the company has added more expensive tiers to its service, built out team-focused features, and recently talked to Extra Crunch about how it scaled its remote-only team.
In an interview Monday, Zapier CEO Wade Foster told TechCrunch that his company now has 400 workers and crossed the $100 million ARR mark last summer.
The Makerpad deal is its first acquisition. TechCrunch asked Makerpad founder Ben Tossell about the structure of the deal, who said via email that his company will operate as a “stand-alone” entity from its new parent company.
The deal doesn’t seem prepped to upend what the smaller startup was working on before it was signed. “Ultimately,” Tossell wrote, “Makerpad’s vision is to educate as many people as possible on the possibilities of building without writing code.”
Foster seems content with that focus, describing to TechCrunch how he intends to let Makerpad operate largely independently, albeit inside a set of editorial guidelines.
TechCrunch asked the Makerpad founder why this was the right time to sell his business. He said that the pairing would help his team take the no-code world farther than it could alone, also noting that the deal was a “no-brainer” over “alternative routes such as VC funding.”
The acquisition was partially driven by a single tweet. This one, in fact. According to Tossell, the CEO of Zapier reached out after reading it, leading to conversations and a deal. Foster expanded on the story during a call, saying that he had long followed Tossell’s work and that the two had met previously at dinners. The tweet wound up in his Slack, he said, so he reached out to the Makerpad founder, and from there it was a pretty quick ramp to a deal.
The two companies have seen rapid growth in recent quarters. Foster detailed to TechCrunch how small businesses have become increasingly reliant on his company’s service in the post-COVID world, with Zapier seeing strong SMB adoption after the pandemic hit. Given the digital transformation’s acceleration, that’s a trend that likely won’t slow soon. And Tossell told TechCrunch that no-code has already “grown bigger than [he] had imagined it could,” with his company seeing users expanding 4x in just under the last year.
Zapier, perhaps one of the largest success stories in the broad swath of technology products that we might call the no-code world, now has an attached community that could help directly add users to its service, and perhaps indirectly by making the aggregate pool of no-coders larger over time.
The no-code space has been active in recent months, as has its sibling niche, the low-code market. The latter has seen recent rounds in the nine figures, as some corporations turn to low-code tools to help them more quickly build internal software. The no-code world has its own successes, like Zapier’s nine-figure revenues.
Foster was neutral on more acquisitions, neither closing the door on them when TechCrunch asked, but not opening it any wider at the same time. On the SPAC question, however, the CEO was a bit clearer. That’s a no.
After having spoken to a grip of no-code and low-code founders and investors in recent months, it seems clear that the broader business market is coming around to low-code services and that smaller companies have been quick adopters of no-code tooling. As low-code tools become increasingly abstracted from coding, and no-code tools add functionality, perhaps we’ll see the two related categories merge.
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