Latest GO BIG News
Sep 14, 2023
Linear The four-year-old startup founded by three Finns is already used by fellow startups like Cohere, Ramp and Runway. It’s now valued at about $400 million as it makes a big-business push. Other startups like Linear. When CEO Kaari Saarinen announced Linear’s new project management software four years ago, 10,000 people, mostly developers, signed up within two months. When Linear’s software became publicly available a year later, it was already used at more than 1,000 companies; its website boasts a who’s who of high-flying customers, from AI unicorns Cohere and Runway to fintech unicorn Ramp. Now, Linear is looking to capitalize on its early hype to win over bigger companies outside the startup set. To do it, Linear raised $35 million in a Series B funding round led by Accel, and including a number of tech executive peers. The round valued Linear at about $400 million, according to three sources with knowledge of the process. Linear said the round was a “significant up round” but declined further comment. According to Saarinen, Linear’s funding round was more about that “new life cycle” for the company — providing a clear signal of the company’s ambitions to startup-shy potential customers and new hires — than the money itself. Linear’s been profitable for the past two years, Saarinen said, while spending just $36,000 on marketing and, until recently, employing just one salesperson. Linear has more money in the bank today than it’s raised from investors, a negative net burn that’s rare for a fast-growing young tech company. “Over the last three years, many companies raised money, but we didn’t really need it,” Saarinen said. “It’s more about: this is a clear new level for us, and we need to focus on different things.” Linear’s software is far from the first to offer tools for ticketing issues, managing roadmaps and development cycles. Atlassian’s Jira product has been around for more than two decades, with GitLab and others more recently releasing issue trackers; on the project side, Asana and a host of others offer their own widely-used tools. What makes Linear different — and why you’ll find it under the hood at so many fellow tech companies, from Sam Altman’s Worldcoin crypto project to publishing platform Substack and software development helper Retool — can be as simple as small features like better keyboard shortcuts that make engineers actually want to use it unprompted, Saarinen said. “These kinds of systems require cooperation and coordination, and if people aren’t there, it doesn’t happen,” Saarinen said. “Rather than having this chaotic process where things are flying in every direction, [Linear has] a pretty streamlined process.” Until this most recent funding, Linear had more than that $17 million raised in the bank. Another explanation for Linear’s early traction: the personal networks of its three Finland-born founders Saarinen, Jori Lallo and Tuomas Artman. Saarinen and Lallo took a previous startup through Silicon Valley accelerator Y Combinator before selling it to Coinbase, where both held early roles; Saarinen later also worked as a design leader at Airbnb. Artman, whom they met in San Francisco’s small community of Finnish tech expats, previously worked as an engineering leader at Uber. After announcing their project in April 2019, Linear’s early demand among test users was enough to raise a $4.2 million seed round led by Sequoia that November, with Index Ventures and a number of founders like Figma’s Dylan Field and Envoy’s Larry Gadea participating. (By that time, with Linear a fully-distributed workforce, its founders had all left San Francisco — Saarinen for the San Diego area, Lallo for New York, and Artman back to Finland.) Just over a year later, Sequoia doubled down in leading a $13 million Series A that was joined by Stripe CEO Patrick Collison and former Twitter executives Dick Costolo and Adam Bain, among others. Until this most recent funding, Linear had more than that $17 million raised in the bank, but hadn’t invested much in sales or support for its customers. In May, it hired Cristina Cordova, a former leader at Stripe and Notion who was investing as a partner at VC firm First Round, to lead its fledgling go-to market efforts. Most of Linear’s monthly revenue growth today comes from existing customers signing up more employees to subscriptions, Cordova said. With the new funds, the company plans to beef up its team to assist such growing accounts and may experiment more in marketing, she added — even if that means dipping out of profitability. The push beyond a startup customer base is nascent. Asked the biggest companies on that customer list today, Linear noted Finland-based Supercell, the mobile game maker owned by Tencent, and several larger-sized tech startups. But Linear’s ambitions to offer more tools across the journey to conceive, develop and release a product could help. Right now, Linear’s tools focus on the “execution” part of development — keeping a project on track, and helping to resolve issues that pop up. Over time, Linear hopes to provide more of a start-to-finish platform that includes early-stage brainstorming and planning, more customer feedback and post-launch analytics, said Miles Clements, an Accel partner and Linear’s newest board director. But one challenge for Linear: the more features it adds to solve the needs of enterprises, the harder it can be to hold onto the simplicity and ease-of-use that has made it a startup favorite to date. At Meter, which offers end-to-end internet infrastructure for businesses, product leader Sean Rose said that before Linear, working in another tool was like holding down a second job. Today, Meter has built its own integrations on top of Linear, such as one that auto-generates notes for each software release. But Meter CEO Anil Varanasi noted that they’ve seen other productivity tools “start out really great,” then collapse under their own complexity as they scale up. “How does Linear avoid the same fate?” he asked. Follow me on Twitter or LinkedIn . Send me a secure tip .
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