Airtable is a cloud collaboration company that was founded in 2012. The company produces spreadsheets that also have features of databases included in them. They have had celebrity endorsements from stars such as Ashton Kutcher, who also invested in the business. The value of Airtable today is estimated to be around $1 billion. This is an impressive figure for a company that is not even ten years old. It is even more impressive when you consider CEO Howie Liu's claim that they were able to secure much of their latest round of funding without even having a pitch deck.
In 2018, Airtable raised over $160 million through two rounds of venture funding. Liu says that he was able to do this without ever having to make a formal presentation to any potential investors. The publicity that the company had from Kutcher and others, plus the rate at which they had grown meant that people were lining up to invest. This is not a position that a lot of companies would ever find themselves in and Airtable needed to be able to show that they could deal with this attention and make it work to their advantage. Although some time was saved by not having to approach investors, they still needed to look into the investors that had approached them to make sure they were the right fit for the business.
However, it was not as simple as potential investors being prepared to just hand their money straight over. Liu had long discussions with all those who were interested in investing and was able to answer all the questions that they had. He had long phone calls with all potential investors and many emails were exchanged. The investors had all the information that they would have gotten from the pitch deck, it was just that this information was not provided in the usual format. In some ways investors got more of the information that they needed in this way as they were able to decide what they wanted to know, rather than just being given the details that Airtable thought was relevant.
Airtable has grown considerably in the years that it has been operating. It was officially founded in 2012 but the first two years were spent developing their product behind closed doors. At the time, the three founders, Howie Liu, Andrew Ofstad and Emmett Nicholas must have wondered whether they were doing the right thing as the company had no income during this period. However, this must have been time well spent because in the early part of 2015 they were able to raise $3 million in funding. Just two years later they raised another $7.6 million from Ashton Kutcher and Charles River Ventures. This shows that even in the early days of the company, they have never really struggled to get hold of the funding that they need.
Getting Ashton Kutcher on board was a good move for the company. When people see him acting in movies or on TV, then they may not realize that he is a successful tech investor with his own company A-Grade Investments. He has invested in some of the biggest companies that are operating all over the world today such as Skype, Uber and Airbnb. Not everything that he is involved in has been a success but overall he has made a large number of profitable investments. Many tech investors know that if they follow his lead, then there is a good chance they will see a return on their money. The fact that he had already invested by the time Airtable was looking for a new round of investment meant that people may be more pre-disposed to investment, even without hearing the pitch.
The service now has over 80,000 regular users and this number is rising all the time. The profile of the company has been raised considerably by the fact that they are now valued at over $1 billion. The story about not having a pitch deck has also given them a lot of attention. This is not the way that things usually work in Silicon Valley and it is definitely not something that would work for every company. Even though it is something that Airtable has been able to do in the past, there is no guarantee that it would work for them again in the future. It is not something that Lui would necessarily recommend but on this occasion there is no denying that it has seemed to pay off.
There are not many companies that have been given a valuation of over $1 billion. This is known in business circles as 'the unicorn valuation'. What this means for Airtable is that whenever there is a discussion about companies that have this valuation, they are going to be a part of it. It inevitably gets people wondering about what it is that Airtable is doing that has given them this valuation. When they start looking into the company, they may find that it is a service that they could use and this would see the company grow even further. As more people get to know about them and start using them, they grow again. Getting into that initial conversation is key and this is something that Airtable has already achieved.
More people than ever before are taking advantage of the benefits that remote working can bring. This means that cloud collaboration services are high in demand. It is now completely possible for everyone who used to work in a particular office to work from home as long as they can all get access to the same documents and information. This is something that Airtable offers but using their service also comes with a number of other advantages. Anyone who has used Airtable will know that there is much more you can use their service for than just entering data in a spreadsheet that you can share with other people. It also acts in a very similar way to a database. The fields of the spreadsheet can be changed to include all types of information such as attachments, images and bar codes. The spreadsheets can be accessed via a desktop or an app and they can be shared with as many people as you choose. Once the spreadsheet has been updated by one person then it will by synced automatically for all users so you are always working in real time.
People can use Airtable for free if they choose and there is a lot of functionality in the free products that are available. However, users can upgrade to premium products for a small fee and this is where Airtable makes its money. Many customers of Airtable are commercial businesses and for these companies, it makes sense to have the premium products because they can make full use of them. Even though commercial customers are the main target for Airtable, all of their software is very accessible. One of the main aims of the company when it first started was to give people access to the kind of tech that would normally only be seen in Silicon Valley. There are many practical uses for Airtable products that everyone can make use of, not just those in business.
Airtable does not take any money out of the business at the moment. All profits are reinvested into the business. It is expected that the business will get to a point where they feel they can be self-sufficient and continue to make a healthy profit. It is at this point that their investors will start to get a return on the money they have put in. This is something that is probably not too far away now and early indications show that all investors should get a healthy return.
Lui has been quoted as saying that the business is at a point where it might just be able to survive if it did not receive any extra investment. However, he believes that the best time to find funding is when you are not going to be reliant on it. Investors are going to be excited to see what can potentially be achieved with their money when it is not just being used to meet running expenses. It also helps to give them confidence that they will get a good return on their money. In some ways, this could have also contributed to the success that Airtable had in raising funding without the use of a pitch deck. The company knew that they would probably be ok without the funding so this relieved a lot of the pressure that companies usually feel in these situations. Airtable were able to take their time when talking to investors and provide them with as much information as they wanted. It didn't matter if this process took a long time because there was no desperation on the part of Airtable to get the deal done.
There is also the possibility that they may take the company public in the future as another way of raising some money. However, at the moment this is not being considered as a way forward as it is not really a direction that the company wants to take. The concern with this is that once the company had gone public then the focus would shift away from producing software that helps people meet their productivity goals, to creating something that they knew would make money. The ethos for the whole of the Airtable team has always been to create something that would make people's lives easier. The fact that it has the potential to earn them some money is a welcome bonus, but it is not the only thing that they are concerned with.
Liu's intention with Airtable is to take it as far as he can, and he has no plans to sell. There is still a lot more that he believes the company can do. There is a very good chance that he could sell his shares in the company for an amount of money that would mean he never has to work again. However, this does not interest him because he does not feel as if he needs a plan B. He has every intention to stick with the company and see what else can be achieved so he is not looking for a way out. He will not entertain anyone who approaches him with an interest in acquiring the company as it is definitely not for sale. He believes that once you have a discussion about selling the company then this idea will always be in the back of your mind and will impact on any decision that you make. He would prefer to just avoid the discussion altogether which is why he will not hold talks with any interested parties.
There are an almost countless amount of productivity tools in the marketplace today that Airtable competes with, but this does not worry Liu. He does not believe that there is any other business out there at the moment that is doing the same things as they are. He also believes that this is not something which is going to change in the near future. He is very confident in the reputation that Airtable has for being the best in the business when it comes to cloud collaboration for spreadsheets. Another company would have to come up with something very special in order to take this status away from them.
Being valued at $1 billion was an important milestone for Airtable but it certainly doesn't mean that they are going to stop there. Lui has been asked before if he believes that the company could one day have a valuation of over $100 billion. His reply to this is usually a simple shrug of the shoulders which suggests that he believes that this is already a foregone conclusion. The success of the business so far means that he could have every reason to be this confident. There is a long way to go yet and the potential for a lot more success is definitely on the horizon.
Written by Garrett Parker
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