This morning Mural, a startup that builds digital collaboration software with a focus on visual presentation, announced that it has closed a $50 million Series C. The new capital, co-led by prior investors Insight Partners and Tiger Global, values the startup at more than $2 billion.
Previously, Mural was valued at around $500 million when it closed a $118 million round last August. Mural also raised a $23 million Series A at the start of 2020.
Mural’s product focuses around a visual collaboration space, akin to a digital whiteboard. Given its product focus, it’s not hard to see why the startup had a good COVID cycle; the world’s companies moved to remote work en masse, leaving offices empty and physical whiteboards un-scribbled. Services like Mural helped fill that, and similar voids. TC caught up with Mural CEO Mariano Suarez-Battan and Insight managing director Nikhil Sachdev to learn more about deal mechanics.
The new unicorn also disclosed that customers generating $100,000 in ARRR tripled to more than 100 organizations in the last year, and that it now has seven customers bringing in at least $1,000,000 in ARR apiece. That second figure is up from a “couple” seven-figure deals at the start of 2020, a figure that the company disclosed at the time of its Series A.
Per Suarez-Battan, Mural has continued the torrid pace of growth that made it a breakout company in 2020. In the last year the company has tripled its annual recurring revenue (ARR), he said. That’s the same pace of growth that the company disclosed when it raised its Series B in Q3 2020. As the company has now disclosed that it has tripled in each of the last two years, we can infer that the company has reached material top line scale.
Mural — known as Mural.ly through 2019 — however, was growing before the pandemic, and doesn’t appear to think that the eventual conclusion of the pandemic will be too deleterious to its growth rates. In a discussion concerning the company’s path after COVID-19, Suarez-Battan noted that many of his company’s customers have multiple offices in disparate locations. Those concerns, even if they returned to a fully in-office setup in time, would still have need for Mural and its software, goes the argument.
With more companies flipping to hybrid-friendly work environments, part-time office cultures, or fully remote organization structures, Mural’s market is moving toward its vision of collaboration at scale sans the need to be sitting next to the people with whom you are trying to be creative. Underscoring the point, Sachdev told TC that COVID was a “huge pull forward” in a trend that was long underway: remote work. He believes that companies executing collaborative, or creative work at a distance was a reality merely accelerated by COVID, not created by it.
The dollar amount of the Series C may seem a bit odd. Why did Mural raise less in its Series C than it did in its preceding Series B? Mural still had most of its previous round on its books, Sachdev said. Our read from that fact is that Mural simply didn’t need to raise another huge round. So, it didn’t.
Insider demand led to the funding event, which for Mural represents incredibly modest dilution (it sold around 4% of its shares at its new valuation) and a massive upsizing in its valuation (a little under 4x). Effectively, Mural was just handed the ability to go out into the market and buy whatever smaller companies and talent it wants, without worrying about dilution or cash concerns, respectively.
Quick growth wasn’t the only reason that Tiger and Insight wanted to buy more of Mural. According to the Insight MD, the startup has retained strong levels of efficiency as it has scaled, venture-speak for an ability to rapidly expand revenues while not similarly boosting the pace at which cash is consumed. It’s the venture equivalent of crowing about operating leverage, essentially.
Suarez-Battan also emphasized during his interview with TC that his company’s net dollar retention, or NDR, is strong. NDR is a key metric for modern software companies, as marginal revenue gains from existing customers are cheaper to secure than net-new accounts. Again, the theme that the metric details is efficient growth.
There’s lots to Mural worth our chewing on in time. The loop of consultants using its service, leading to new customers. How the firm works with consultants, period. The list goes on. Let’s see how quickly Mural can keep growing in the second half of 2021. The next time we chat with the firm it will be time to harangue it for hard revenue figures. Let’s see how that goes!
