No-Code Website Builder Webflow Went From Near Bankruptcy To A $72 Million Series A Funding Round – ForbesCMS
On his fourth attempt at building the company of his dreams, Webflow CEO Vlad Magdalin made it a point to write every employee a handwritten note ahead of his software company’s annual all-hands retreat. In July, after writing 120 of them, the entrepreneur said it might be time to end the tradition. “My hand is cramping,” Magdalin says. “I may need to find a new plan.”
After years of struggle, Webflow is breaking out. In 2012, Magdalin, his brother Sergie and a friend, Bryant Chou, founded Webflow with the promise of providing a better website builder, one that allowed anyone to spin up a professional-caliber website without knowing how to code. Seven years later, Webflow is at the forefront of a wave of specialist startups looking to change how companies build. And with an unusual new $72 million Series A funding round, Magdalin and Webflow now have the war chest to build a big business around their “no code” development approach.
At $72 million in funding for a company that had only raised $2.9 million previously, the round led by venture capital firm Accel stretches the meaning of a “Series A,” and reflects Webflow’s years of building off of its own balance sheet while investors shunned. Webflow seed investor Silversmith Capital contributed “significantly,” Magdalin says, along with previous investors Rainfall Capital, Draper Associates and FundersClub. The large Series A is in part explained by the relatively mature stage of Webflow’s business, which has been profitable for two years and counts 47,000 business customers. Webflow’s annualized revenue is more than $20 million today, a source with knowledge of the company’s financials says; the company is now valued between $350 million and $400 million after the investment, according to the source.
“It’s a license for us to be more bold in the product bets that we are making, and to really step out into the community as a leader in the no-code space,” Magdalin says. “I hope it gives a bit of a fire under our butts. It’s a huge opportunity.”
For years, Magdalin was the only one who felt that way. A religious refugee from Russia who moved with his family to Sacramento when he was 9, Magdalin learned graphic design as a high school student to help his father’s import-export business advertise in Russian-language classifieds, before studying computer science at California Polytechnic State University-San Luis Obispo with a yearlong detour in 3D animation at San Francisco’s Academy of Art University in between. There, he fell in love with programming while building a chat app called Chatterfox, but opted for a steady job as a software engineer at Intuit upon graduation.
By the time he left Intuit in 2012, Magdalin, now 36 years old, had already tried to get Webflow off the ground three times. His idea dated back to his college senior paper, studying how tools that could translate drag-and-drop design into clean back-end code could lower the barrier of entry for entrepreneurs to build the next Facebook or Airbnb. This time, he convinced Chou, then an Intuit coworker and 33, to join the project with his brother, Sergie, now 32, and at the time designing an ecommerce website for a local skate shop. But their plan to quickly raise a Kickstarter fizzled, and saddled with credit card debt, Magdalin was close to running out of time. Seven months in, they posted to Hacker News, a popular techie message board, and the post went viral. Heartened, they spent six more months developing a simple first version of their tools.
“No code” wasn’t buzzy yet – elements of it can be found in hot startups today such as Airtable, Notion and Zapier – but Webflow wasn’t the first to try to remove the technical complexity to managing work or building tools, either. What was different this time, however, was the rise of Google’s Chrome browser and improved technology that could support the types of sites makable using Webflow’s code. The tool took off first among freelance web designers, providing enough early traction to convince Y Combinator to change its mind and admit the startup in 2013. Webflow raised its $2.9 million seed round from the investors above, Khosla Ventures and Y Combinator’s own fund after finishing the program, though many VCs were skeptical that its target market was too niche and facing too many competitors. A host of businesses offer website building tools, from GoDaddy and Wix to startups like Weebly, acquired last year by Square, and Squarespace.
“I think Vlad saw the market coming,” says Hustle Fund’s Eric Bahn, a former coworker at Intuit who was one of Webflow’s first angel investors. “We pushed them early on to go for bigger customers, or add marketing tools. But they felt like they needed to spend their time developing a reputation with the community.”
Convinced they had a different model than other site builders, Webflow spent five years building for the freelance design community before those users took it in-house at larger-sized businesses. Many are startups, though Webflow also counts Dell as a customer. Today, users run everything from ad campaigns to the full documentation for a programming language on sites powered by Webflow. At Atlanta-based digital agency Edgar Allan, Webflow allows one developer to do the work of three, shaving two months or more off website redesigns for clients that can last six to eight months, says manager Mason Poe.
Within other startups, Webflow untethers website production from the engineering team so they can focus on their business’ differentiated products instead. At car sharing service Getaround, marketing took over its site earlier this year. Using Webflow, different teams like SEO or legal are able to edit their own pages on the site through Webflow without screwing anything else up. “At first we got a lot of eye rolls from the engineering team, like, oh, marketing is using this crazy tool,” says marketing project manager Meg Murray. “When we showed it to them, they were stoked.” And at human resources software maker Lattice, a Forbes Next Billion Dollar Startup, a similar website hand-off to marketing is saving the company at least $50,000 in costs, CEO Jack Altman estimates.
That workflow made Accel, a firm that’s backed software successes such as Atlassian, Qualtrics and Slack – as well as Squarespace, a website creator — comfortable that Webflow is building something new. Though it mostly replaces WordPress today, Webflow has room to expand into new areas of development beyond websites, says partner Arun Mathew, much like Atlassian and Qualtrics eventually expanded scopes. Expect Webflow to move into other areas of software development and app-building in the months to come. “That’s the real opportunity,” Mathew says.
After years of self-sufficiency, Magdalin says Webflow would’ve been just fine continuing on without a large capital infusion. But the money will allow Webflow to invest more in marketing, community events and in hiring to build its non-website builder products. “If we can do that sooner and still focus on customers and our team, why not?” he says. “Why not make a bigger dent in the universe?”
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