Website Builder Webflow Hits $4 Billion Valuation As It Nears $100 Million Revenue – Forbes
Webflow’s founders are chief experience officer Sergie Magdalin, CEO Vlad Magdalin and chief technology Bryant Chou.
Vlad Magdalin says he’s been getting odd looks at Starbucks in recent weeks when he tells the baristas his first name. But he has no reservations about the war in Ukraine initiated by the man who shares that name—the day the invasion began, Magdalin renounced his dual Russian citizenship. Webflow, the website-building startup of which he is CEO, is no longer doing business in Russia. A number of Ukrainian relief efforts, too, have launched using its “no code” tool that allows anyone to create a professional website without having coding skills.
It’s amid this “surreal” backdrop that Magdalin, who is of part Ukrainian, part Russian heritage, is announcing a new funding round for his company. “You kind of have to give yourself permission to hold both realities,” he says. Webflow said Wednesday that it raised $120 million in a Series C round led by Y Combinator Continuity, with participation from existing investors including CapitalG and Accel. The round raises the San Francisco-based startup’s valuation to $4 billion and comes as it is on track to hit $100 million annual recurring revenue within a month.
Webflow was founded in 2012 by Magdalin and his brother Sergie—religious refugees who moved from Russia as children—as well as their friend Bryant Chou. After narrowly avoiding bankruptcy in its early days, the company capitalized on growing buzz in “no code” software and were accepted into Y Combinator’s accelerator. But after taking $2.9 million in seed funding in 2014, the trio chose to hunker down and bootstrap the company until it became self-sustaining. “I was freaked out about this idea of venture capital coming in to destroy companies,” says Magdalin, who by 2019 had led Webflow to profitability and more than $10 million in annualized revenue.
When he raised his Series A round that year, Magdalin devised what he calls “a social contract” that any prospective investor had to agree to in order for him to accept their money.
It stipulates in writing that they must agree to prioritize Webflow’s mission and its employees above its revenue. “Sometimes I’d share that thing with investors up front and I’d never hear from them again,” Magdalin says. Those who agreed are beginning to see the rewards of their conviction. Webflow now has more than 200,000 customers and is starting to see new streams of revenue from bets that it took years ago—investing in things that don’t generate revenue right away is a core tenet of the mission Magdalin speaks of in his contract.
One example is a tool for users to create animations. While the feature is not a necessity for most people launching a website, Magdalin says that over time, Webflow saw an uptick of new customers who discovered it as a result of the animations, which include a badge labeled “Made in Webflow.” The startup is also starting to see accelerated growth in its business selling to enterprise companies like Univision and PwC. Over the course of last year, revenue in this segment grew to $8 million from about $1 million, Magdalin says.
The new funding will go toward more product development on long-term bets, Magdalin says. He sees Webflow growing in two to three years into a “no code” tool not only to build websites, but also software applications. “We want to turn any knowledge worker into a potential developer so that they are developing software, but they don’t necessarily have to know how to write the code to do it,” Magdalin says. “Websites are our beachhead to expand into that larger space.”
Webflow is also setting aside $10 million from the new round for grants to users creating resources or holding events to help other people use Webflow. The company now has 400 employees and $335 million in total capital raised; enough of the money from past funding rounds is still in the bank, Magdalin says, that the company can self-sustain for at least four years. In the event of an extended market downturn, the new capital can help Webflow survive or strengthen itself through business acquisitions, says Rowghani, who is joining the board as part of the raise. Magdalin says there are no plans to take the company to an IPO anytime soon, and his new investor affirms that he shouldn’t feel any pressure to rush despite competitors like website builder Wix and e-commerce company Shopify already being public. “There are certain companies where they become huge simply because the [total addressable market] is huge,” Rowghani says. “One of the nice things about this market is that we don’t have to worry that much about competition.”
Meet the cheapest US states to buy a house
A new study analyzing Zillow data has found that the monthly median sale price of a house last year was more than $500,000 in Utah, California and Colorado — and more than a staggering $800,000 in Hawaii.
The study, conducted by Studio City realtors, found that Hawaii clocked in as the most expensive state in the U.S. for homebuyers. On the island, the average home price was $805,775 — hundreds of thousands of dollars more than the cheapest state on the list.
Studio City realtor Tony Mariotti noted that market turbulence contributed to a “significant increase” in house prices across the U.S.
Home prices went up nationwide in February after months of declines amid low inventory and a small uptick in demand — and experts have said they expect affordability will continue to be a problem for prospective homebuyers in the months ahead.
Here are the priciest and cheapest U.S. states to buy a home:
The most expensive states to buy a home
Eight states and Washington, D.C., saw a monthly median sale price of a house last year of $400,000 or higher, with Oregon sitting at that exact figure.
Washington state, Nevada, Montana and Washington, D.C., came in between $402,900 and $487,500.
California, Colorado and Hawaii were the top three most expensive, at $537,000, $537,125 and $805,775 in monthly median sale prices last year, respectively.
Costs differed in different areas within states: for example, the median monthly sale price of a house last year in California’s cheapest city of Red Bluff was $320,000 — while the ticket in its most expensive city of San Jose was $1,370,000.
Don’t just hug a tree this Arbor Day — plant one, too
Nearly five years ago, Hurricane Michael became the first Category 5 storm to hit the United States in 25 years. It left a trail of destruction in its wake, and my community of Panama City — located in the Florida Panhandle — was hit especially hard. Since then, working together as neighbors and citizens, we’ve made significant progress in key recovery areas, including rebuilding key and vital infrastructure, enhancing quality of life, developing our downtown, and attracting new businesses across a mix of industries. However, one of our most important recovery efforts lies within our tree canopy restoration — an often overlooked but vital area of disaster recovery and prevention.
When Hurricane Michael uprooted nearly 80 percent of Panama City’s trees — approximately a million trees, generating 5.7 million cubic yards of debris within the city — it created serious challenges. Not only did we lose the beautiful canopy from 100-year-old oak trees, but the vital function of the trees was lost, the first of which was the absorption of groundwater. The loss of so many trees significantly increased the risk of flooding in our community,
where we now experience flooding in areas that haven’t typically flooded in the 114-year history of the city. The second function lost from the lack of trees is shade.
Trees serve to mitigate the urban heat island effect, where an entire city is warmed by concrete being heated by the sun. These increased temperatures not only result in uncomfortably hot weather but can also lead to other extreme weather events like wildfires. Since the storm, Panama City has experienced increased flooding whenever thunderstorms roll through, in addition to wildfires that consumed over 40,000 acres last year – both due in part to the damaged tree canopy and loss of trees.
The problems facing VA modernization are bigger than its software systems
The list of criticisms of the new Veterans Affairs (VA) electronic health record system, Oracle Cerner, is long.
Thousands of doctors’ orders went missing, putting patient safety at risk. Its downtime has been high compared to the old system, though it has improved. The new system is expensive: $16 billion so far, up from the $10 billion originally estimated. And, so far, it has been rolled out at just five of the VA’s 171 sites.
One of the problems is that the old record system, VistA, has its own lengthy list of reasons why it cannot continue to serve as the main software for VA hospitals. VistA was coded in Mumps, a computer language so old that few programmers are available to work on it. This old system is also not cloud-based, and cloud-based systems are now standard. And each VA location has customized VistA for its own particular needs, which means that each system is, in its way, unique, and interoperability is not-at-all simple.
Even those who still love VistA concede that sticking with the old software is not a long-term solution. And even in the short-term, VistA is expensive to maintain, costing $900 million for this purpose just last year. So VA has been sinking money into two different electronic health record systems, each one broken in its own way.
As of last Friday, VA has called for a complete reset of the modernization program and a halt to any further Oracle Cerner rollouts.
How did this implementation go so wrong? And what should be done now?
Electronic health record (EHR) implementations often take a long time and go over budget. And while the VA implementation of its new EHR software has been challenging for a number of reasons, all of these reasons could be, and indeed were, anticipated.
VA is unique in its geographical breadth — most EHR rollouts occur in a single health care system that is physically situated in one state, not across 50. Most EHRs, including the new Oracle Cerner system, are designed around billing, which is not a focus for providers in VA hospitals. The VA patient population is also different than the general public, with different frequencies of disease (more PTSD and missing limbs; less pregnancy and pediatric care), and it requires management of referrals and care outside the VA system.
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