VCs dish on why they backed Notion, the productivity startup that just raised $50 million at a $2 billion valuation during a market meltdown
Still, not every business is flailing: Productivity startup Notion just closed a new $50 million round of financing at a $2 billion valuation. The whole process, from the initial email to the public announcement on Wednesday, took about two weeks — withbetween when the parties agreed on terms and the deal was signed, — and saw Notion's valuation jump 150% over its latest round.
For a select group of new investors, the deal brings to a close a years-long chase. Here's the backstory of how a small group of venture investors won over the notoriously VC-shy startup. After Sarah Cannon joined Index Ventures in 2018, she became a board observer at Slack and started researching other early-stage productivity startups. She stumbled on Notion casually, but knew right away it was special.
Kothari emailed Cannon, asking for a meeting the next morning. It wasn't an uncommon occurrence for their relationship, but once Cannon was on the phone, Kothari conferenced Zhou in, and she realized that this was it. She sent a memo detailing the investment to the other partners at Index. Many had met Kothari at a meeting months earlier, but none had met Zhou. Both agreed to go over data and metrics in a pitch meeting on Zoom.
The biggest point of contention among the firm's partners, Cannon said, was whether the valuation and market opportunity made sense given the current economic uncertainty.
Notion's latest fundraise sold off only 2% of the company, and because the early backers had only put in a small amount of money for a small percentage of ownership, their stake hasNaval Ravikant, a startup investor and the cofounder of AngelList, wrote a check into Notion's seed round in 2013. The company wouldn't launch its product publicly until 2016.
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