Forward-looking statements in this document include, but are not limited to, statements about future financial performance, business plans, market opportunities and beliefs and company objectives for future operations. In some cases, you can identify forward-looking statements by the following words: “will,” “expect,” “would,” “intend,” “believe,” or other comparable terminology. This report contains forward-looking statements regarding the companies reviewed as part of this report that are based on beliefs and assumptions and on information currently available to us during the preparation of this report.
Sacra generally does not take steps to independently verify the accuracy or completeness of this information, other than by speaking with representatives of the company when possible.Sacra has not received compensation from the company that is the subject of the research report.And with their close proximity to the SaaS application workflows of millions of users, they have an extremely high resolution view into how people use their tools. Because Zapier only raised $1.4M in venture capital, the team has the cushion to build without pressure from their investors. Zapier does have two powerful things going for it, however. Valuation: Zapier is worth $7B on $1.4M raised In our bull case, Zapier builds the no-code super aggregator and is able to grow at 50% CAGR for the next five years, growing into a nearly $30B valuation.In our bear case, growth slows to 20%~ amidst competition from other no-code platforms and native integrations. In our base case, Zapier remains the logic layer of no-code and continues to grow at 37% CAGR to $800M+ in ARR by 2026.Zapier’s strength is that like Netflix, it has commoditized its suppliers and gotten closer to their customers-now, it has the opportunity to leverage its distribution and mindshare to eat Airtable, create its own Zapier-native data store, and build the no-code super aggregator.But Zapier risks being disintermediated with the rise of native integration APIs like Tray.io and Paragon, verticalized automation solutions like Alloy Automation and Parabola, and Airtable building its own integrations platform, all of which aim to offer a better user experience around integrations.
Zapier has a virtual monopoly in the no-code integrations space.Their tiny amount of capital raised gives them a 100x ratio of ARR/funding that puts them in elite territory alongside other largely-bootstrapped companies like Atlassian (128x) and Cloudinary (80x). Despite only raising $1.4M in venture capital, Zapier hit $100M ARR in just under 10 years-compare to Shopify at 6 years and Carta at 6.5 years.In March of 2021, Zapier hit $140M in ARR, growing at about 50% from the year before and maintaining a 50% CAGR3, comparable to Shopify and CrowdStrike and faster than Datadog (40%), DocuSign (40%), and Twilio (35%).Our model values Zapier at $7B in the company’s base case, about 40% higher than the $5B price at which early investors recently sold stock to Sequoia and Steadfast Financial in a secondary sale.Zapier is an integration platform and marketplace that gives non-technical end-users the ability to use “triggers” and “actions” to connect SaaS applications that aren’t natively integrated.Unless Zapier attacks these competitive threats head-on, Zapier could ultimately end up like Dropbox: a $10B+ company that could have been worth much more.