Introduction
Let’s say, you don’t want to have your email inbox open all day, but you do have Slack or Microsoft Teams open most of the time. You want to set something up so that when an important email comes in, you automatically get a message on Slack or Teams, so that you know about it, without having to monitor email all day. But you have no idea how to code something like this.
That’s where Zapier and Make.com come in.
They are both no-code platforms that let you easily set up automations and connect different apps. All you do is drag and drop, select the apps you want to connect and the events you want Zapier to listen for, and soon you have an automation set up.
The ease of use and the power of these tools have made these companies into rocket ships. There are even companies hiring full-time staff to focus solely on automation using tools like Zapier and Make.
Z- AI- PIer
Neither Zapier or Make are AI companies. But they are getting some residual benefits from the recent AI boom. The growth of AI has meant that nearly all companies are thinking about how they can automate certain processes within their business and save time. And that way of thinking leads companies naturally to using solutions like these. They tend to realise that not all automation need to use ChatGPT or Claude, and they use Zapier or Make to streamline processes within their business.
Valuation and Upside
Make currently makes (no pun intended) about $50 million a year in recurring revenue, and they have a $1 billion valuation. Zapier’s current valuation is $5 billion and they make $140 million in recurring revenue.
When companies are worth this much, you would be forgiven for thinking that you should have invested or started working there five years ago, and all the upside is now gone. But there are plenty of indications that this industry may grow much more in future.
Zapier’s growth up to this point is indicative of how much the market actually needs this solution, and how good their solution is. They have got to $140 million in annual recurring revenue and a $5 billion valuation, and while getting there they only raised $1.4 million in funding. And until 2020, they didn’t even have a sales team. That’s unheard of.
These two platforms have also put a lot of work in to their user experience and it shows. I’ve used both to set up integrations before and it really is as easy as selecting the apps you want to connect and selecting the particular events in each app you need for the automation.
Both companies have developed a very strong position in the market. Zapier connects with over 3000 apps, Make with over 1000. They both have partnerships with some of the biggest software companies in the world, so they are building moats that are hard to breach.
In the case of Make, it would need a 5x in valuation to even reach the size of its competitor, Zapier. In the case of Zapier, it's the leading company in a very rapidly growing industry, which means there could be more upside to come, despite its already high valuation.
Risks
Obviously, Zapier and Make compete with each other. But not only that, in an industry as hot as the automation industry right now, there are always going to new entrants. Other competitors like Microsoft Power Automate do pose big threats, and this is a rapidly evolving space.
Another key risk is the risk posed by high valuations. As we said, the company earns $50 million a year and is valued at $1 billion. Which means it is valued at 20 x earnings. Whereas Zapier has an even higher valuation multiple of 35, which reflect its status as the current market leader.
For those that don’t know much about valuation… these are pretty damn high (technical term). A valuation that high means that some future growth is already priced in and accounted for by the market. This means that for the valuations of these companies to go up even more, they can't just grow, they have to grow faster than people already expect they will grow. That is a much higher hurdle to clear.
Another risk for both these companies is that their whole business model is dependent on integrations with third parties (the other software companies that they connect). Any changes in third-party technology, and APIs could have a big impact on the usefulness of these platforms. In that way, the growth of these two company's is dependent on factors outside their control.
Roles they are hiring for
Zapier’s open jobs are engineering-heavy. But there are still some sales, marketing, product management and support roles.
Another thing to note is that Zapier is a fully remote company.
Make.com on the other hand, seems to be hiring mostly in Europe - Prague and Madrid for most of its roles. Their hiring seems evenly spread among many departments: community, content, customer support, data roles, engineering, marketing and HR.
Conclusion
This was a two-for-one special and leads to a conclusion which is a menu of options rather than one specific recommendation. If you want to bet on the more established market leader taking more and more of the extra users coming to this space, Zapier might be the right place to go for you.
If, on the other hand, you are willing to take on a bit more risk for the possibility of more upside, Make.com may be the place for you.