The Firm Out to Dethrone Israel's Monday.com

ClickUp started as an alternative to Craigslist. Now, with an array of office and project management tools, it hopes to overtake Monday.com as the leading productivity app

Simi Spotler
Simi Spotler
Simi Spotler
Simi Spotler

In an ad that has drawn over 600,000 views on YouTube, a man with a microphone can be seen stopping people on the street and asking them: “What day of the week do you hate the most?” They all say the same thing: “Monday.”

“If Monday were a facial expression, what would it be?” the interviewer asked – and in response he received looks expressing disgust. When he asked the interviewees if they needed something to help them improve their productivity, the answer was: “Of course. What do yuo have to offer?” And then he answers dramatically: “ClickUp,” and then the ad tells how ClickUp is the ultimate software for task management.

Monday of course is not the story behind the clip – it is the Israeli tech company Monday.com. Aggressively, but with a bit of humor, ClickUp has taken a swipe at its competitor Monday.com at every opportunity it can – including with jokes and memes on social media.

Monday.com is not the only one: Another video posted by the company shows an employee with a nametag that says Jira – the same name as a competing task management tool popular among developers – who is being fired by his young boss as she is listing all his problems, all of which are really the advantages ClickUp’s software has over Jira.

Monday.com's founders Eran Zinman (R) and Roy ManCredit: Netanel Tobias

ClickUp began as a side project. In 2017, CEO Zeb Evans – the founder and CEO of ClickUp – was trying to establish a rival to Craigslist, the popular online classified ads board. As part of their work, his team tried out many task management tools for managing shared projects – and discovered that all the tools created more work for them and didn’t really help to make them more productive. The team decided to build its own internal task management tools – and after a few months of work on it they realized that it had greater value than their original product – and very quickly they switched to working on what became ClickUp.

The company’s growth is an uncommon story, too. Evans invested in the first two years $2.5 million of his own money to pay salaries and develop the product. The first customers came through organic traffic using SEO on Google. The product and the investment in organic SEO traffic proved themselves, and the initial investment brought ClickUp within two years to annual revenues of $25 million. In its latest funding round, in October 2021, a few of the world’s leading venture capital funds, including Andreessen Horowitz, Tiger Global Management and Lightspeed Venture Partners.

Evans recently said in a blog post that they saw the product was ready and met a great need in the market – and realized the time had come to raise money to enter the stages of accelerated growth. Between June 2020 and October 2021, ClickUp raised $535 million in three funding rounds. Within 18 months, the company’s value rose from nothing to $4 billion and revenues rose over 300 percent, said Evans. 80,000 organizations are now using ClickUp. In a podcast in November, Evans told how the company had reached annual recurring revenues (ARR) of $85 million, and he expected another jump in the ARR rate of 200 percent in 2022 – to $250 million.

In comparison, Monday.com forecasts that its revenues will reach over $470 million this year, which reflects a growth rate of 53 percent, and it has 150,000 customers. The revenue rate – a figure that Monday.com no longer provides – is even higher. Another competitor, Asana, forecasts revenues of approximately $530 million, which reflects 40 percent growth – and at the end of 2021 it had some 120,000 customers. Another prominent company in the sector is Atlassian, which is traded at a company value of $65 billion – and has two major tools in the market: Jira, which focuses on developers, and Trello, which is popular among small teams looking for a relatively inexpensive solution.

ClickUp's founder and CEO Zeb EvensCredit: Screen capture / LinkedIn (Zeb Evans)

Big messy market

What makes ClickUp a company with the highest growth rate in the category of task management tools is the combination of timing, strategy and aggressive pricing. Monday.com and Asana were founded a decade ago, during a period in which the sector was still in its infancy – and the two firms were forced to work hard and invest a lot of resources in getting development teams to adopt their tools. When ClickUp was launched in 2018, its product met a market much more ready for it, and the company could concentrate on product development and finding customers through organic traffic – without having to burn the cash needed to buy its initial customers.

Another aspect that enabled the rapid growth of ClickUp was the price. The company offered a limited free subscription at the beginning, or a $5 a month subscription that included more features – without any limit on the number of users. Monday.com’s basic package costs $10 a month per user, with a minimum of three users. Monday.com launched its first free version just last year. Asana has a free version and a basic version that costs $13.50 a month – without a minimum number of users. All of these prices are for a package that renews every month automatically – but they all have a discount if you buy an annual subscription. ClickUp is also generous in the discounts it gives for a commitment for an annual subscription: Between 35 percent to 45 percent – compared to about 20 percent for Asana and Monday.com.

ClickUp may be growing rapidly, but without knowing how much cash it is burning it is hard to evaluate its potential. Monday.com lost $129 million last year, but did succeed in turning its cash flow positive because a large number of its subscribers pay in advance for a year.

Big vs small businesses

According to the popular comparison website G2, some 82 percent of reviews were from small businesses, compared to Monday.com’s 66 percent. The data is a testimony to Clickup’s success with small and medium-size businesses, while Monday.com works with large and enterprise firms. Monday.com also works with third-party vendors that help sell their products and augment them. Sources say that this helps explain why smaller firms find their service to be a bit too complex and convoluted, and thus can prefer a firm like Clickup.

However, this also underscores Clickup’s dilemma: Does Monday.com’s focus on big firms mean that is the better market, with better clients and better returns, or does Monday’s problems prove the opposite - that Clickup is right to focus on small firms and that they have spotted the right market. Only time will tell.

Full disclosure: The Haaretz-TheMarker Group is a paying customer of ClickUp.

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