Notes app Notion raises money at $2 billion valuation

Notion, a San Francisco-based startup that’s developed a cult following for its cloud-based collaboration tool, raised $50 million in new funding at a $2 billion valuation.

Why it matters: The entire round happened after the coronavirus pandemic spread to the U.S.

• Index Ventures led the round, and was joined by existing investors.
• Notion says it's been profitable for the past 18 months.

“I think the velocity of how fast this moved is, I think, something nobody could have predicted,” Notion COO Akshay Kothari tells Axios of the company’s decision to raise funding once the Coronavirus crisis hit.

• “I think a lot of potential recruits would want to join a stable company, and a lot of our customers would want to use Notion knowing that it’ll be around for a long time,” he adds.
• According to Kothari, after rebuffing Index Ventures and others for more than a year, the startup called up Index’s Sarah Cannon on Wednesday of last week, and was finalizing the deal by Friday.
• “The Notion team is visionary, the market is the 1B people that use Microsoft Office, and the engagement looks like Slack,” a source familiar with Index Ventures’ thinking tells Axios.

By the numbers:

• Grew from one million to four million user in the last year, and saw China-based user signups grow threefold since the virus pandemic started.
• According to Forbes, the company reportedly has an annualized run rate of $30 million.
• Notion says its latest funding gives it 10 years of runway.

The big question: “I think long term were most likely an enterprise product,” says Kothari. Can a startup that’s entirely grown on word-of-mouth take on enterprise customers?

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