Israeli success story: Monday.com’s road from underdog to SaaS giant
Israeli success story: Monday.com’s road from underdog to SaaS giant
The startup that transformed workplace software eyes new horizons after a billion-dollar milestone. In an exclusive interview, co-CEOs Roy Mann and Eran Zinman emphasize that the company’s potential remains vastly underappreciated.
Monday, two weeks ago, was supposed to be a celebratory milestone for software company monday.com. Roy Mann and Eran Zinman, the co-founders and co-CEOs, had announced at the end of summer that their software company had reached an annual recurring revenue of $1 billion. The third-quarter report, published that day, was expected to turn the milestone into a celebration.
It didn’t happen. While monday successfully surpassed a threshold that few Israeli high-tech companies achieve, American investors on Nasdaq were unimpressed. Why? The element of surprise over its performance seemed to have worn off. Additionally, the hype surrounding the stock in recent months had inflated expectations to unrealistic levels. As a result, despite strong performance and nearly 30% growth in the quarter, Wall Street gave monday's overall positive report a cold reception. The stock plunged by 15% in a single day, erasing nearly $3 billion from its peak valuation of $16 billion the day before. When asked about the sharp decline, monday’s executives simply shrugged and said, “We have no control over market expectations.”
In recent months, expectations for monday had reached lofty heights, but this wasn’t always the case. Early in its journey, the company was considered an underdog. A few years ago, if investors had been asked which local Israeli high-tech company would be the first—or even capable—of hitting $1 billion in annual revenue, few would have bet on monday. Many investors underestimated the company's work management system, dismissively calling it a "colorful Excel." Founders Mann and Zinman heard this criticism often, particularly as reasons for rejecting investment in the company they founded in 2012. Fast forward to its IPO in 2021 and the $1 billion milestone just three years later, and the "colorful Excel" has proven its critics wrong.
Even after last Monday’s stock drop, monday has nearly doubled its value since its IPO and is now trading at approximately $13.8 billion. This positions it among the five largest Israeli companies by market capitalization. However, what sets monday apart is not just its valuation but its robust revenue growth. Achieving $1 billion in annual revenue is no small feat, requiring companies to navigate challenges that no investor hype or market sentiment can easily bridge. Ironically, being seen as an underdog early on may have helped monday reach its current success.
The startup mentality persists
How did monday get here? Observing the approach of its co-founders offers insight. Mann and Zinman, who first met in an IDF technology unit, maintain a dynamic that embodies the spirit of a startup. The two do almost everything together, including walking to and from the office each day. They project an attitude of openness and possibility, which resonates throughout the company.
“It’s important for us to reflect what’s truly happening at monday today,” says Mann, 46, the more reserved of the two. “We feel very different from how people perceive us externally.” Zinman, 41, elaborates: “We see the company as being in its adolescence. Many think we’re already a mature, established company, but we’re just entering a phase of transformation. We believe we can grow tenfold, but outsiders don’t understand that. We’re not complacent—we’re ambitious and far from realizing the company’s full potential.”
Mann offers a more strategic perspective: “Most companies that reach significant market share ride the wave and grow comfortably with the market. We’re not like that. We’re only just beginning. While we lead in our original category—project management software—we’ve also entered three entirely new categories. New employees often say outsiders don’t grasp what’s happening here. Many thought we’d already plateaued,” he says with a laugh.
Cracking the code of workplace productivity
It’s easy to see why monday might be viewed as unremarkable: its core product is software that helps organizations manage projects. The market for such tools is highly competitive and saturated with similar offerings. The technological barrier to entry isn’t particularly high either. So, what sets monday apart? The company appears to have tapped into something fundamental about how organizations work.
Monday users praise its software for being intuitive, user-friendly, and unobtrusive—qualities that distinguish it from platforms like Slack, which some find overwhelming. This simplicity proved especially valuable in times of crisis. For example, after October 7, civil defense forces rapidly adopted monday’s software to coordinate operations overnight.
Beyond its simplicity, monday’s success also stems from its approach to customer acquisition and growth. Unlike companies that push their software organization-wide through centralized sales, monday typically starts with a single department. This department then “infects” others with enthusiasm for the platform, leading to organic expansion within the organization. This strategy contributes to a remarkable metric: since its IPO, monday’s customer retention rate has consistently exceeded 100%. This indicates the company is not only retaining clients but also expanding its presence within existing customers.
As monday continues to scale, its journey highlights the power of adaptability, ambition, and a willingness to defy expectations. From being dismissed as a "colorful Excel" to becoming one of Israel’s most valuable companies, Monday’s story is one of resilience and vision.
Although it has not yet displaced software like Jira, which is widely used by R&D organizations, monday is steadily eating into the market. At the same time, the company is expanding into large-scale enterprises, such as banks, rather than relying on adoption primarily by other startups. This new focus on major clients allowed monday, at the beginning of the year, to make the bold move of raising the price of its product licenses without losing customers or slowing its growth.
Monday is expected to close this year with revenues of approximately $970 million, an operating profit of $100 million, and a cash flow of $250 million. Its gross margin—around 90% of revenue—is exceptional compared to its peers, many of which were established around the same time but prioritized growth at the expense of profitability. While monday can no longer double its revenue annually, as it did before going public, it has consistently maintained high double-digit growth over the past four years.
This growth is mirrored in the company’s headcount. Monday now employs nearly 2,500 people, with approximately 1,100 based in Israel. Just five years ago, it had only 600 employees, and at the time of its IPO three years ago, the workforce stood at 800. The rapid expansion has created a need for more office space. Monday, which currently occupies half of the 35-story Rubinstein Tower in Tel Aviv, is reportedly in advanced negotiations to lease approximately a third of the office space in the Azrieli Group's Spiral Tower, currently under construction in Tel Aviv. The deal, estimated at NIS 700–800 million for a 10-year lease, could become one of the largest real estate rental agreements in Israel.
"We didn’t inititate most of what happened at the company"
Despite monday’s transformation from a small startup into a major company within a decade, its founders insist they haven’t lost control over their creation. “We never sought control—these are the things that hold you back,” says Eran Zinman. “Most of the things happening in the company today weren’t initiated by us. We don’t dictate from the top; we allow people to take the lead and express themselves. This also takes some pressure off us—not everything has to come from us.”
Still, there’s a notable difference between managing rapid growth in a small company and doing so when the company is valued in the billions.
“We’ve always dreamed big,” Zinman reflects. “When our annual revenue was $15–20 million, we put a $1 billion revenue target on the wall in our offices. Back then, people laughed at us—it seemed impossible. But we stayed focused, and here we are. Now we’re updating that goal to $10 billion. Competitors have reached $10 billion, and we believe we have everything needed to get there. It’s hard to say if we’ll succeed, but we certainly have the means. Personally, I feel the same now as I did when we were aiming for $1 billion—maybe I’m just too optimistic.”
Co-founder Roy Mann adds a more data-driven perspective: “It’s not just about dreaming big. The market is starting to recognize our potential. When we went public, investors compared us to companies like Asana or Smartsheets. I asked when they’d stop making those comparisons and start seeing us as something bigger. Their answer? Monday needed to show the world it was a platform, not just a one-product company. We’ve done that. Analysts now refer to us as a ‘mini-Salesforce.’ At our IPO, our valuation multiple was the lowest among our peers. Today, it’s the highest. Monday’s stock ranks among the top ten SaaS companies globally. While we may never reach Salesforce’s scale—$35 billion in annual revenue and a $300 billion market cap—we see this as our chance to make a leap forward.”
A reluctance to acquire and be acquired
Monday looks to companies like Palo Alto Networks, founded by Nir Zuk, as models for expanding into new categories. The goal is to offer customers a single platform to meet all their enterprise software needs. However, monday operates in a different environment from Zuk’s cybersecurity market. In enterprise software, monday faces large, established players who have grown through aggressive acquisitions. By contrast, monday has focused on organic growth, avoiding acquisitions thus far.
Mann explains, “I understand the excitement around making an acquisition,” with a hint of sarcasm. “But we don’t operate on those terms. Integrating another company is a significant effort, and we’re still growing quickly on our own. While we haven’t yet used the ‘muscle’ required for acquisitions, we constantly monitor the market and receive offers.”
On the flip side, monday has long been wary of being acquired itself. This resistance is deeply ingrained in the company’s culture. When monday went public in 2021, it was revealed that Mann holds a “founder’s share,” giving him veto power over board decisions on various issues, including selling the company.
Mann’s influence extends further: he owns an unusually large stake in Monday—11.2%. With the exercise of stock options and restricted shares, Mann’s holdings are currently valued at nearly $1.5 billion, making him one of Israel’s wealthiest individuals. Zinman’s stake is smaller, at 4.4%, but still substantial, currently valued at around $600 million.
Until recently, monday’s largest shareholder was the Insight Partners venture capital fund, led by Jeff Horing, which invested in the company from its early stages. After the IPO, Insight held a 28.7% stake in monday, but it sold most of its shares by the end of 2023 and is no longer classified as an interested party. Horing still serves as chairman of the company’s board, but with Insight’s exit, Mann has become the largest shareholder.
When asked whether the company's current market valuation makes him less worried about a potential sale, Mann explains: “When we were a private company, we blocked any possibility of an acquisition. Since going public, we’ve added a special section to the prospectus that explicitly outlines our commitment to remain independent. We always rejected offers outright to eliminate any temptation. You must stand firm in your intention to build a big company.”
"AI is not a threat, but a boost"
Regarding competition, monday operates in a strong market, which naturally attracts new entrants.
“The key is that we’re expanding the market we’re targeting,” Mann says. “We are continually adding new products, and our platform is set to transform the workplace software landscape.”
In what way?
“Other software, like Jira, is built to meet a specific need. In contrast, we’ve built a platform where users can continuously add more tools. For example, within just one year, we reached fourth place in the CRM (Customer Relationship Management) market for medium-sized organizations,” Mann explains.
Zinman adds: “Large companies like Microsoft, Google, and Salesforce succeed across many categories, thanks in part to their strong brands. That’s why we now view monday not just as a product but as a brand.”
What about the AI threat? Could it make platforms like monday obsolete? NICE lost nearly half of its market value over such concerns.
“For us, AI is not a threat but a boost,” Mann responds. “Some investors have shifted their entire portfolios to AI-related stocks, and many of those investors are also backing monday. When I asked one of them about this, he explained that he wasn’t solely focused on AI technologies but also on areas that AI adoption would strengthen. In his view, monday paired with AI is a powerful combination. Why? Because we’ve built a strong infrastructure for implementing AI-driven tools, akin to a new programming language. AI won’t disrupt us—it will amplify our value. For instance, with AI, monday can provide insights into project risks in real time, something that humans typically only understand in hindsight.”
"Investors want founders to lead"
As Israeli companies scale, it’s common for American CEOs to take over. Yet, monday continues to be led by its two Israeli founders. How do they divide responsibilities?
Zinman explains: “There’s no strict division between us. We complement each other and rarely argue. If one of us isn’t around, the other can make decisions, and that works fine. Early on, investors frequently questioned our joint management style, but on Wall Street, founder-led companies are valued highly. They think of Amazon, Apple, and Meta. Roy and I spend hours together every day. Walking to and from the office is often our best time to brainstorm.”
Mann agrees: “Having a co-leader helps us identify blind spots. The idea that founders must be replaced is an outdated notion. Investors now prefer founders to remain at the helm.”
With the current geopolitical instability and flight disruptions, are investors pressuring one of you to relocate to the U.S.?
“We’ve never received such a request,” says Mann. “In fact, investors appreciate our strong development presence in Israel. Even during the height of the conflict, when 12% of our Israeli employees were in military reserves, and many others were called to duty in the north, we’ve managed to maintain our operations. Beyond minor delays in development plans, the war hasn’t significantly impacted us.”
Has monday outgrown its Israeli identity?
“Monday is a global company, with 55% of our workforce outside Israel. Still, our management meetings are conducted in Hebrew,” Zinman says.
Debunking the "spin-off" myth
Toward the end of the discussion, Mann and Zinman address the misconception that Monday was a spin-off from Wix. The myth stems from the fact that the two met in Unit 9900 of the IDF’s Intelligence Corps, where Mann recruited Zinman to a special team he led as a reservist. Later, the two parted ways—Mann worked at Wix, and Zinman at Conduit—before conceiving the idea that would eventually become monday.
“It’s true that in the beginning, we worked out of Wix’s office, and they were our first customer, but the idea was entirely ours,” Mann clarifies. “I wanted to start my own venture, and Wix simply gave us a room—without even a window.”
Still, Wix’s CEO Avishai Abrahami believed in their vision and invested in the company. He retains a 1% stake in monday (worth approximately $113 million) and serves on its board. Ironically, Wix, founded in 2006, is currently valued at about 25% less than monday.
Why the name change from the unusual "dapulse"?
“By 2016, we had $20 million in revenue, but the name was holding us back. Senior executives hesitated to sign deals with a company with such a slang-like name. Despite concerns from investors, we insisted on the change,” Mann recalls. “We chose ‘monday’ because it evokes both a reminder and an emotional connection. People don’t typically love the first day of the workweek, and turning that around reflected our adaptability. Since then, we’ve embraced the name fully, even timing our financial report releases for the second Monday of the month.”
