Data shows private market players are more highly valued than their public market counterparts despite dramatically less revenue. Primary intel gathered from interviews with software buyers reveals a mixed bag on CSAT, features, and pricing across vendors in the space.
The collaboration & project management software market is becoming increasingly crowded.
In 2021, these companies — which help teams communicate, collaborate, and manage projects more efficiently — collectively raised $2B+ in equity funding. 2021 also saw the exits of Monday.com (went public at a $5.8B valuation) and Wrike (acquired for $2.3B).
In 2022, against the backdrop of the larger venture market pullback, deal activity to collaboration & project management vendors dropped dramatically. Part of this was likely a function of the amount of capital raised in 2021 — most companies raised warchests at lofty multiples, eliminating a need for more capital in 2022.
Now, public and private players alike are jockeying for revenue growth (and profitability) amid rising competition in the space.
In this market analysis report, we’ll dig into:
- What are the top collaboration & project management software vendors?
- What are the 5 primary challenges that buyers/users face with these solutions?
- What are software buyers saying about collaboration & project management software vendors?
- Market stats: How do key collaboration & project management software vendors compare across funding, valuation, revenue multiples, and other efficiency stats?
What are the top collaboration & project management software vendors?
Notable collaboration & project management software vendors include:
Ten of the players listed above have public or private market valuations of $1B+ (more on the valuations below).
Monday.com, Asana, and Smartsheet are all publicly traded. Trello (acquired by Atlassian for $425M), Wrike (acquired by Citrix for $2.3B), and Planview (acquired by TA Associates and TPG Capital) are no longer standalone companies.
What are the 5 biggest challenges that buyers/users face with these solutions?
Through Yardstiq, analysts regularly speak with buyers of collaboration & project management (C&PM) software solutions. Below are the 5 common challenges we’ve heard they face in their adoption of these solutions.
- User adoption: Getting team members to use the new software is a challenge especially in the face of existing habits. Training and support is critical.
- Integration with existing systems: Success often requires integration with other tools and systems, i.e., email, CRM, and HRIS. This can be complex and time-consuming.
- Data migration: Migrating data and info from one solution to a new C&PM solution is a time-consuming and error-prone process. As a result, companies often have multiple tools.
- Customization: Certain workflows within companies require customization. Some products are limited here and getting technical resources to create these workflows is challenging.
- Ongoing maintenance and support: Keeping C&PM solutions clean and usable requires dedicated time and resources.
What are software buyers saying about specific collaboration & project management software vendors?
Conversations with customers of these collaboration & project management software also reveal first-hand areas of opportunity, competitive advantages, strengths, and more.
Below are some quotes from Yardstiq.
Customers with access to Yardstiq can click on the links below to read the full transcript.
Market stats: How do key collaboration & project management software vendors compare across funding, valuation, revenue multiples, and other efficiency stats?
Across the top 10 players in the space, below are comparisons and graphs analyzing their:
- Revenue multiples (price to sales)
- Revenue:funding efficiency ratios
- Funding:valuation ratios
- The funding activity shown earlier has largely been driven by mega-rounds ($100M+ deals) to the unicorns in the space, as the massive financings raised by the companies below highlight.
- Current, non-exited private players in collaboration & project management have raised dramatically more than their now-public peers had raised prior to going public.
- Airtable has raised 2.6x its next most well-funded competitor.
- Similar to funding, private market valuations are dramatically higher than public peers.
- In this case, the valuations of Airtable and Notion are nearly double those of Monday.com and Smartsheet and more than 3x Asana’s.
- Although private market players have higher funding raised and valuations, the public players in collaboration & project management software have dramatically higher reported revenues.
- Smartsheet has 3.87x the amount of revenue as Airtable, but Airtable’s valuation is 2.29x Smartsheet’s.
Revenue multiple comparison
- The median and average price/revenue valuation multiple (in other words, valuation divided by revenue) of public players in the space are 9.3x and 11.4x, respectively.
- Privately held players by comparison have a median and average multiple of 51.3x and 56.5x, respectively.
- Productboard has the loftiest valuation multiple of 117.4x. Airtable, which leads in total funding, also has a lofty valuation multiple of 82.4x.
Revenue to funding comparison
- The ratio of revenue to funding (revenue:funding) highlights how well companies have been able to turn funding into revenue.
- The dichotomy between public and private players is very obvious as the graphs below illustrate.
Valuation to funding comparison
- The ratio of valuation to funding (valuation:funding) is a measure of how efficient a company has been in translating funding into value. It also provides a loose proxy for the amount of ownership that a company’s founders and team retain.
- Wrike, which was valued at $2.3B at the time of its acquisition and has raised $26M, has the highest valuation:funding ratio of 86.5. Airtable, which is the most highly valued player in the space as well as the top funded, has a valuation:funding ratio of 8.7.