May 26, 2022

Webflow well funded This week, a no-code startup helping clients build websites raised another round of capital.

According to a Forbes report, Webflow has raised $120 million in new funding at a $4 billion valuation. Forbes also writes that the company will soon reach $100 million in annual recurring revenue (ARR), has over 200,000 customers, and currently earns about 8% of its total revenue from business customers.

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The above comes just one year after Webflow raised $140 million at a $2.1 billion valuation, giving the company an almost 2x valuation increase with new capital.

But what we care about more than a rough estimate of the company is the revenue multiple that this figure shows. Why? With the nine-figure startup round still in its final stages, we’re hearing from investors and founders alike that conditions are tightening up.

In fact, the public market has significantly lowered the value of software revenues, raising some concerns that late-stage startups will suffer if they bounce back to raise more capital. (For example, this sentiment was reflected on CNBC this morning.)

A few days ago, we saw the era of 40x ARR start-ups fading, and more conservative metrics becoming commonplace. However, with a $4 billion valuation and an ARR of around $100 million, Webflow is valued at exactly the same numbers, which we consider old fashioned fiction.

Are 40x ARR multipliers fair game for startups looking to increase revenue? The answer is that they may be rare, but there are a few things about Webflow that will likely earn it a markup. It’s only fair to rate Webflow in terms of its rich multiplicity, but we can’t assume other startups will be able to follow suit this year.

So let’s do it.

web flow and 40x requests

To understand the last round of Webflow and the resulting ARR multiplier, we need to dig a bit into history. Based on our coverage of past rounds of the company and a series of notes from an interview with Webflow CEO Vlad Magdalin, the following:

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