Notion Series C

Sequoia and Coatue handed Notion $275 million at a $10 billion valuation in October 2021, which is roughly equivalent to paying Supreme Court prices for a marble notebook because it has nice margins. This deal exemplifies everything wrong with late-stage venture capital during the great monetary hallucination—a productivity tool that's basically a wiki with better fonts commanding the GDP of a small nation. The company had maybe $30-50M in ARR at the time, which means these investors were paying 200x+ revenue multiples for software that competes with Google Docs, Airtable, Coda, ClickUp, and approximately fourteen thousand other tab-hoarding solutions. I've seen more rational pricing at airport Hudson News locations. The fundamentals here are a college student's Evernote replacement that somehow convinced institutional money it was building the operating system for human consciousness.

The timing of this Series C couldn't smell more like peak froth if it arrived in a Patagonia vest doing ayahuasca. October 2021 sits perfectly in that golden window when Tiger Global was throwing term sheets at anything with monthly active users and a Webflow site. Interest rates were still pinned to zero, ZIRP brain had metastasized through Sand Hill Road, and everyone convinced themselves that work-from-home meant every SaaS tool would 100x because Karen from accounting now needed seventeen apps to feel productive in her home office. Notion's growth was legitimately impressive—they went viral with students and startups—but conflating product-market fit with sustainable enterprise dominance is how you end up justifying valuations that would make a 1999 day trader blush. The macro environment has since performed a complete 180, rendering this price tag absolutely catastrophic for anyone dreaming of exit multiples.

Let's address the investor signaling, which in this case signals pure lemming behavior dressed up as conviction. Coatue and Sequoia leading this round meant something in 2021—it meant "we have too much money and not enough places to deploy it." These firms were in their index-the-entire-internet phase, writing checks to maintain ownership percentages rather than because the numbers made coherent sense. The participation here doesn't validate the deal; it indicts the entire late-stage ecosystem's complete abandonment of disciplined pricing. Sure, Notion had impressive user growth and that coveted bottoms-up adoption motion, but so did Roam Research before it faceplanted into irrelevance. The competitive moat here is approximately as deep as a San Francisco puddle—switching costs are low, feature parity is achievable, and Microsoft could clone this in a weekend if they gave a shit. Network effects? Minimal. Proprietary data? It's your grocery lists and meeting notes.

Exit potential for this deal ranges from "grim" to "someone's getting a brutal down round." At $10B, Notion needs to find a buyer willing to pay $15-20B minimum to make the Series C investors whole, which means Microsoft, Google, Salesforce, or... actually that's the entire list. An IPO at current multiples? Software companies are trading at 5-10x revenue now, meaning Notion would need $1.5-2B in ARR to justify this valuation, and they're nowhere close. The 2021 vintage of mega-rounds is aging like milk in a heatwave—just look at the markdowns across Coatue's portfolio. This is a company that will either exit sideways through a strategic acquisition that makes VCs cry into their allocation spreadsheets, or spend the next five years trying to "grow into" a valuation that was stupid when they raised it and is borderline offensive now. The downside here isn't theoretical; it's baked into the cap table like concrete boots.