Airtable is a tool that many small businesses are using to organize their business data. The software allows users to create a variety of different database structures that can be used for various business purposes. The company recently raised $270 million from investors, and that has led us to wonder, how does Airtable make money? What is the business model of Airtable? Let’s find out.
Airtable is a SaaS company and operates on a freemium business model, which means that it makes money by charging for premium features. Airtable has a free plan with limited functionality and three paid plans: Plus, Pro, and Enterprise.
About Airtable
Howie Liu, along with Andrew Ofstad, and Emmett Nicholas, founded Airtable in 2012. The company offers cloud-based software that allows users to create and share highly functional, yet, easy-to-use online databases.
This private company is not yet profitable. The company worked on the software for about two years in stealth mode and grew rapidly with the support of angel investors, including the actor Ashton Kutcher. The flagship product launched in 2014, along with the iOS app.
The process of scaling up a business has changed significantly with the advent of cloud computing services. Most businesses today rely heavily on cloud technology for their core infrastructure.
Airtable is one such service, which offers an array of features to meet all your database management needs. It is not just about hosting your data in the cloud; it also allows you to collaborate easily with people regardless of their location and provides you with the agility to grow your business without compromising on any feature.
Handling sensitive commercial data requires you to be extra careful about security, redundant systems, and safety measures to ensure that only authorized individuals can make changes. All these aspects are provided by Airtable at a lesser cost while allowing you to scale up as your business requires.
How Does Airtable Make Money?
There is a limited free version of the software. The paid Plus version is $12 per month (discounted to $120 annually) per user. The paid Pro version is $20 per month (billed annually) per user.
Annual revenue estimates for Airtable range from $47.9 million, reported by GrowJo, to $65 million per year, reported by LATKA. The company is private, so it does not release any financial information. The current user base is estimated at 250,000+ companies, paying at least $120 per year per user if not getting an enterprise-level discount.
Airtable has 417 employees (August 2021). The Airtable employee count nearly doubled from a year ago. Estimated annual revenues per employee are $114,748.
The biggest customers for Airtable are the enterprise-level tech companies, like Tesla, that pay an annual subscription fee for its 70,000+ Tesla employees.
The annual reoccurring revenue (ARR) from enterprise customers is negotiated on a case-by-case basis by the sales staff of Airtable. Other large companies using Airtable include A-E Networks, Autodesk, Buzzfeed, Condé Nast Entertainment, Cole Hann, Expedia, Medium, Netflix, Shopify, Time, and many others.
Airtable Valuation
Notable investors Airtable include Grade-A Investments (Aston Kuther’s fund), CRV, Caffeinated Capital, Freestyle Capital, Data Collective, Founder Collective, CrunchFund, and the Box Group.
Business Upside reports that Airtable raised $3 million in seed capital in February 2015, followed by Series A for $7.6 million in May 2015. Series B in May 2018 was $52 million. Series C in November 2018 was $100 million, giving the company a valuation of $1.1 billion at that time.
Airtable raised $185 million in September 2020 as Series D, increasing the company’s value from $1.1 billion to $2.585 billion. Series E in March 2021 was a whopping $270 million, making the company worth $5.8 billion. That is an incredibly high valuation for a private company that the founder, Howie Liu, says has no intention at any time in the near future of going public.
LATKA rates Airtable as one of the most successful software as a service (SaaS) companies. Revenues for 2021 are estimated to be $65 million from over 250,000 users.
To put this into perspective, if the annual reoccurring revenues (ARR) are $65 million, the valuation of $5.8 billion is 89x ARR.
Here is how the valuation of Airtable compares to its top ten competitors:
| Company | Market Cap |
|---|---|
| Salesforce | $226 billion (public) |
| Atlassian (owns Trello) | $66.7 billion (public) |
| Citrix (owns Wrike) | $12.3 billion (public) |
| Monday.com | $9.74 billion (public) |
| ClickUp | $1 billion (private) |
| Quickbase | Sold in January 2019 for $1 billion |
| Teamwork | Startup – Raised $70 million in July 2021 |
| Stackby | Raises $12.6 million in May 2020 |
| Ninox | Startup – Raised $3 million in December 2020 |
| AppSheet | Acquired by Alphabet (Google) |
Competitors of Airtable
Competitors of Airtable include Trello, ClickUp, Monday.com, Wrike, Teamwork, and others. The Airtable API is able to connect with the output of most of its competitors and integrate their functions within the Airtable system.
Becoming a Unicorn
A unicorn is a company that reaches $1 billion in valuation. Airtable reached this milestone in 2018 with about 80,000 regular users. It helped that the angel round of investment included an investment by the high-profile celebrity actor Ashton Kutcher.
Besides being an actor, Kutcher is known for his savvy investments in technology companies through his A-Grade Investments venture capital firm. Kutcher was also an early investor in Skype, Spotify, Uber, Airbnb, and others.
Kutcher’s investment increased the popularity of the software. However, it was Airtable’s usefulness that was truly responsible for its rapid adoption.
How Does Airtable Work?
Airtable is a cloud-based offering, so everything is online and runs from the Airtable cloud servers.
The one disadvantage of using Airtable is that the software cannot be used offline, except for downloads of CSV format spreadsheet files, which are used to be imported into simple spreadsheet software. Without an Internet connection, there is no way to use the software fully because of its collaborative nature.
The concept of Airtable is to give users an easily recognizable format of the table from a typical spreadsheet like Excel and make the table cells be able to do all kinds of interesting things. The category of these tools is called “no-code.” The users add fields to a flexible relational database model that can use what is in the fields for further processing.
The field can hold almost anything from text, media, attachments, links, barcodes, calculators, tags, checkboxes, multiple selections, and outputs from more than one thousand automatically integrated systems.
Views
Common uses are to make a content calendar, a product roadmap, and an event planner. The user decides how to view the data in multiple ways.
Examples of views include:
- Grid: The grid layout is like a classic spreadsheet with a big difference in that everything can be color-coded and organized by date and priority.
- Calendar: The calendar view is organized by month and date. Each calendar entry can also link to other media.
- Gallery: The gallery view is a visual representation of project management with color-coded tags shown for the departments involved.
- Kanban: The Kanban-style is organized by columns that are low, medium, and high priority, plus an extra column for a wish list.
Publishing Views
Views can be published in many ways, including:
- Gant: This is a project flowchart based on steps, timelines, and phases to complete a project.
- Web Page Design: This is a what-you-see-is-what-you-get (WYSIWYG), drag and drop, graphical user interface (GUI) design tool. It is very intuitive and easy to use without needing much instruction.
- SendGrid: This feature gives the user the ability to send the output of a grid to another person or people by email. This feature makes it easy to manage email campaigns and send bulk emails.
- Scheduler: This feature tracks multiple users’ calendars to find available options for appointment scheduling for multiple parties.
- Custom Solution: It is easy to build a custom app for any particular team’s needs.
Airtable has a vibrant community forum of active developers who are using the tools to create custom apps. Users are encouraged to share what they are building and get help from other Airtable developers.
Business Process Automation
Business process automation is one way to increase human efficiency by having mundane tasks performed automatically. An example of this is when a new piece of created content is submitted, a notification sent to all the involved parties is made automatically.
Another way to move projects forward is to use the feature of Create Task to create a work task based on a trigger automatically. An example of this would be using the approval of an advertising campaign to trigger a final legal review for compliance and forward the ad for placement in the campaign when it passes legal approval.
Triggers can also cause custom programming code to run, such as an API to connect to one of the many integrated apps.
Airtable Integrations
Airtable was designed with support for most of the popular apps. It has a resilient API. Airtable works with Automate.io, Integromat, Workato, and Zapier to connect Airtable to more than a thousand websites and other apps.
Some of the most popular apps that work with Airtable include Asana, Basecamp, Dropbox, Google Docs, and TheSound. Airtable integrates with most of its competitors.
Market Risks for Airtable
When it first started, Airtable did well with small- to medium-sized organizations of 100 employees or less. Then, it turned its focus on the larger enterprise organizations with thousands of employees. The company successfully captured some six-figure deals with brand-name companies such as Tesla and Netflix.
The challenge is the acquisition cost of these large enterprise customers is probably very high. Right now, all the revenues coming in are being used to pay for the operational costs of Airtable and the likely, extensive sales and marketing efforts.
With no access to the company’s financial records, we can only speculate about its ongoing monthly cash burn since it’s a private company.
The company has raised a total of $356 million so far. It may need to raise more capital as the company may lose more money over the next few years. This is the pattern of a growth company that focuses on building up a customer base instead of short-term profits.
One helpful thing is the effect of the pandemic on companies that make online collaboration tools was a huge increase in their customer base. Airtable, like many others in the tech sector, experienced a positive effect from the pandemic.
If the company can keep its customers happy and the churn down low enough, it has a good chance to continue to increase its customer base.
Conclusion: How Does Airtable Make Money?
In conclusion, we have seen that Airtable makes money through a freemium business model. They offer their basic services free of cost but charge a fee for using their plus, pro, and enterprise versions.
Airtable is powerful and easy-to-use database software that allows you to store, display, and sort your data in an intuitive interface.
We explained the business model of Airtable in detail, which drew heavily from existing research, and a bit of our own digging. You must have gathered a lot of information about this company, their services, their online presence, their earning potential, and the positives as well as the negatives about the company.
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