Few young software companies have had as great a year as San Diego-based ClickUp. The company, which makes business productivity tools for task management, goals and docs, raised its first bit of outside funding in mid-2020.
Just six months later, it has reached a $1 billion valuation after doubling its customer base and revenue increased ninefold as businesses embraced remote work.
The new funding and valuation after just a few months of hefty growth show just how closely investors are watching the productivity software space. I spoke with ClickUp CEO Zeb Evans yesterday to get his insights on the challenges of hypergrowth and why it made sense to say “yes” to the check.
This interview has edited for length and clarity.
TechCrunch: This has been an awfully busy year for your team. What’s happened since we talked about your Series A?
Zeb Evans: The last time we chatted with you, we were at an inflection point where we had seen a lot of growth pre-COVID and then post-COVID we saw that growth continue. So we just really kept up those growth rates and really increased in some areas. Last time we chatted we had about 100,000 teams and now we’re over double that with over 200,000 teams that use our software. I think we were at about a million users and now we’re well over two million users that use the product as well.
That’s interesting, so it sounds like you’ve found a sweet spot in terms of team size?
Yeah, our number of users per team ends up being around 10 people or a little bit more than that. And that’s really stayed true from six months ago to today.
How has your own team’s size changed?
We’re right around 200 people right now, so we’ve definitely more than doubled since the last time that we talked, and we’re going to double again hopefully in the next quarter so we’ve got an aggressive hiring plan to do that.
Cool, so you’ve doubled your user base in six months as well as your team. How has your team adjusted to scaling so quickly?
It’s a good question. I think that the biggest thing that we’ve always focused on is shipping a new version of ClickUp every week. That is our differentiation. We’ve kind of created these iterative cycles called natural product market fit and it’s been hard to keep up with that. I mean, we’ve done it but as you scale, you know you have many more users and more considerations to take into every feature that you change and feature that you develop.
I think that’s been like the biggest thing we’ve been focused on and listening to that community that that is ever-growing every week. Obviously hiring is always top of mind also, and we haven’t done that as fast as we’d like to. But we’re making improvements there and we’re getting there.
A lot of startups raised opportunistic rounds during what’s seemed to be a very hot market, at what point did you think that it might make sense to raise even more money after closing that Series A?
So, our Series A was our first outside capital and we didn’t really know what that would do at the time. What we saw when we raised that fund was that we were able to really accelerate our vision and our product. We’ve used these resources very efficiently and we saw great unit economics come out of that. And also as you mentioned, it’s certainly a good time and a great market to be in — the productivity market is just the hottest right now. So it was kind of a trifecta of that but the real reason to raise was certainly to be able to continue that product growth and the acceleration of scaling that comes with raising money.
So many productivity tool startups have popped up in the last year. How do you ensure potential customers are coming to ClickUp and not another service?
So usually customers will come for some piece of the platform, the most common is project management, docs or goals. Those are like the three entry points about that we see. So I mean to give you an example, somebody like Webflow came to us just for project management, and as they started using project management they started to replace four or five pieces of software with ClickUp.
We have other examples of people that come just for goals and they think that they’re just going to use goals for it but then it ends up replacing their task management software or their document management software also so those are the three entry points that we see, project management is the most common out of them though.
With other productivity startups out there raising huge rounds, is that just expanding the market or is every successful player just another threat to your team?
I’ve always had this vision of actually being that winner-take-most scenario. My thesis is that the market is so fragmented because you have to use so many different tools because those tools are opinionated themselves. So, engineering has to use Jira, marketing has to use something like Asana or Wrike, personal users have to use something like Trello and then you have to have a document management somewhere else or your wiki management somewhere else or OKR software somewhere else.
So there really is no choice right now for it to not be fragmented. We are that first platform that compares feature-to-feature, and you can rip and replace them. It’s not just some no-code platform where you can hack something together to replace all these tools. Feature-for-feature, we can replace those tools and put them in one platform. So it’s not just like a value play of using one app instead of three or four, it’s an efficiency play by saving so much time and frustration from having all the other different solutions.
Productivity platform ClickUp raises $35 million from Craft Ventures
When you see Slack’s acquisition and how their trajectory seemed to shift after Microsoft swerved into their lane, how are you thinking about the threat of a giant taking you on?
We’re certainly conscious of it but at the end of the day, it still goes back to the same point: Microsoft can bundle a bunch of different pieces of software together, but they don’t have one piece of software that does it at all and it’s just inherently different between the efficiency and the user experience when you have this one platform that does everything, rather than several different pieces.
Microsoft can bundle products together or Salesforce can bundle a few, but at the end of the day, it’s still going to be fundamentally different than having one platform that has it all within that same ecosystem. So, we were certainly aware of it but I think that it’s still apples and oranges to at least where we see the vision for the next year.
Is M&A part of your growth strategy?
It depends on where you look. If we would acquire, that’s certainly a path of other companies that would be a possibility. But we’ve never wanted to sell, our plan has always been an IPO and I think that’s the way to create the longest-value products and sustainable products.
Otherwise, usually what happens, and in almost every example you can point to as soon as a company gets acquired the product is not really changing anymore; like that product is that product and we don’t want that to happen. I’m a product founder, I still work in product every day, I love product so I would never give that up.
You wrapped your Series A six months ago, are you going to be wrapping your Series C six months from now?
(laughs) I think this will keep us going for a while, though to be honest with you I would’ve said the same thing with the Series A. But once you kind of get in this game of the hypergrowth and the acceleration growth and you start looking at financial unit economics, it really does make sense in some respects.
Before, I didn’t really understand why you would raise that amount of money at that valuation, but when you look under the hood at financial unit economics and net retention and growth on a monthly basis, it actually does make financial sense.
So yeah I guess to answer your question, I don’t know and we’ll see but I think this will last us awhile.
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