Webflow’s fascinating new spherical is a superb time to debate 2022 enterprise capital valuation dynamics

Webflow, a well-funded no-code startup that helps clients construct web sites, raised a brand new spherical of capital this week.

Per Forbes reporting, Webflow landed $120 million in recent funds at a $4 billion valuation. Forbes additionally writes that the corporate will attain the $100 million annual recurring income (ARR) mark shortly, has greater than 200,000 clients, and at the moment earns round 8% of its complete prime line from enterprise clients.

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The above comes somewhat over a 12 months after Webflow raised $140 million at a $2.1 billion valuation, giving the corporate a roughly 2x valuation bump with its new capital.

However what we care about greater than the corporate’s uncooked valuation is the income a number of that the determine represents. Why? As a result of whereas nine-figure startup rounds are nonetheless getting achieved, we’re listening to from buyers and founders alike that phrases are tightening.

Much more, the general public market has dramatically lower the worth of software program revenues, resulting in some concern that late-stage startups are going to undergo after they return to boost extra capital. (This sentiment, for instance, was echoed this morning in CNBC.)

A couple of days in the past we famous that the period of startup valuations at 40x ARR was fading and that extra conservative metrics have been changing into frequent. With a $4 billion valuation and roughly $100 million ARR, nonetheless, Webflow is valued at exactly the quantity that we solid as a figment of yesteryear.

Are 40x ARR multiples nonetheless truthful recreation for startups which have reached income scale? The reply is that they might show more and more uncommon, however that Webflow has just a few issues going for it which can be doubtless affording it a valuation premium. It’s price weighing Webflow itself within the context of its wealthy a number of — however maybe not presuming that different startups will be capable of observe its instance this 12 months.

So let’s try this.

Webflow and the 40x query

To know Webflow’s newest spherical and ensuing ARR a number of, we’ve to perform a little historic digging. Pulling from our protection of the corporate’s earlier spherical, and a set of notes from an interview with Webflow CEO Vlad Magdalin, the next: