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Monday.com. One of the fastest growing software companies. Now it's dying. From a $15 billion market cap, to $3 billion. And in less than a year. This company was everywhere. Advertised on basically every YouTube video. Every Google search. So, what happened? Lawsuits. Marketing spend larger than revenue. And a billion-dollar promise, quietly walked back. But it's not just Monday. Something massive is happening in software itself. The entire industry may never be the same. In the early 2010s, corporate work was very different.
Collaboration, project management, tasks, everything was sorta all over the place. Excel spreadsheets, Gantt charts, email chains forty replies deep, and weekly meetings. There were a few products: Trello, Asana, Microsoft Project. But, it was all a bit technical. It was mostly just for HR or management. Two developers, Eran Zinman and Roy Mann, were looking for a simple way to track Eran's coworkers' projects at Wix, which were rapidly scaling, and having those growth pains. To solve this, they created a visual, no-code software that allowed teams to
build custom workflows for projects. But, there were two big problems. It wasn't called Monday. Not yet. It was called Dapulse. A name might not sound like a big problem… but it was. And second, when it came time to break into the Western market, Dapulse faced major obstacles. In project management, companies are rarely quick to switch tools, even if their current system isn't great. Especially with established players like Asana and Microsoft Project already dominating the space. And, even when they did get attention, the product name worked against them. In Silicon Valley, Dapulse struggled
to be taken seriously. Every sales call focused on the name instead of the product. For marketing director Joel Goldstein, it was pretty embarrassing. "I knew it was really bad when I went on TV for the first time in my life and all the anchor could focus on was how bad the name Dapulse was." They had to change the name. They already had a strong product, but no one was focused on that. But, to what? And that wasn't the only change. Instead of competing directly with Asana and Microsoft, which mainly targeted managers, developers and engineers.
Monday went wider. They targeted non-technical teams like marketing departments, creative agencies, and HR teams. And they would go way broader down the line. But for now, it was working. Before the rebrand in November 2017, the company had 18,000 paying customers. By 2018, that number had grown to 35,000, then 80,000 in 2019. And with more users, came more funding, from $25 million in 2017, to $50 million within a year, and then to $150 million, valuing the company at $1.9 billion. That name, Monday.com, was suddenly everywhere. It was universal. It sounded synonymous with work itself. But all of this was nothing.
Monday's real big break came during the pandemic. The pandemic ushered in remote work, and companies needed software to better manage the team and tasks, without being in person. A lot of management at the time happened in person. Meetings, talking at desks, whiteboards. A lot of it was in the same room, so the software didn't need to be as strong. But when everyone's remote… that's all out the window. A unified platform like Monday, was perfect. Everyone was on the same page, even if no one was in the same room. Sign-ups exploded. Revenue climbed 85% year over year to $58 million that quarter. But, they were still losing a lot of money.
Regardless, it was the perfect time to take the next step: an IPO. Zoom and Salesforce had already poured in $150 million before the IPO. With shares priced between $125 and $140, the company raised $574 million at a $6.8-7.8 billion valuation. The stock climbed to $400 per share by late 2021. Everything was going great. But there are big gaps in this story. Monday was still losing a ton of money. Also, how did Monday manage to compete with Asana so quickly, while Trello and Notion were also rising and taking ground?
Well, when we look closer, things start to get a bit strange. Take a look at their YouTube channel. Over 1 billion views. But most of that is paid for. Monday was spending a lot on advertising. That might not sound crazy, but, this was a lot, a lot. The amount of money Monday.com was pouring into advertising, is staggering. But for now, Monday was pretty much doing the opposite of everyone else. Remember what I said about them going broad? Well, in the words of their AdWords team leader: [Rotem Shay]: "Our target decision-maker [was] basically anyone [with] a computer [who] works with a team. Some might say that we hacked B2B
to become B2C, but I say that our marketing approach has always been H2H-human to human." Their competitors were targeting tech, sales, managers. But Monday was basically targeting everyone but those people. To get as much growth as possible, and as fast as possible. And then, rather than targeting tech companies, they focused on real-world industries like construction, wedding planning, and even churches. They uploaded data from their existing customer database into Facebook's lookalike feature, allowing their ads to reach people with similar profiles. Then they expanded beyond Facebook,
to Google and in particular YouTube ads. So many, YouTube, Ads. While this was working, Monday was slowly turning into that one annoying ad you could not skip. While they were targeting everyone, they were also annoying everyone. In 2020, they spent 118% of their revenue on sales and marketing. Not profit, revenue. $191 million on S&M against $161 million in revenue. In Q1 2021, around their IPO, they spent $63M, or 107% of revenue, just on advertising. They were trying to capture as much market share as possible, as fast as possible. To be clear: Monday had a non-GAAP gross margin of 88%.
Essentially, the product itself is cheap to deliver, and profitable. But in the big picture, they were losing money. Some estimate Monday.com had an operating margin of negative 86%, one of the lowest out of all SaaS products. Every dollar they made cost them one dollar and eighty six cents. Over time, Monday.com was spending 116% of its revenue on sales and marketing, one of the highest figures in all of SaaS. Though, this was never intended to be a long-term strategy. In their S-1, they stated: "As our business scales through customer expansion and market awareness of Monday.com, we anticipate that sales and marketing expenses as a percent
of total revenue will continue to decline." The hope was that it would eventually pay off. So… would it? Monday is currently struggling, but we're still growing. We're trying to get to 1 million subscribers, and if you can click that subscribe button, we might be able to reach it! Setup In November 2024, Monday officially passed $1 billion in annual revenue, with 90% gross margins, $45 million in net income, and $82.4 million in free cash flow. Everything had panned out. Monday was making profit. Great… Then something strange happened. The stock fell 20% in a single day.
Their market cap dropped by $3 billion overnight. Why? Something massive was taking place. People just didn't realize how big this would be. Tension Wall Street believed there were problems ahead, so they lowered the expected growth rate to 28%, down from 33%. Eran Zinman, in response, said: "We have no control over market expectations, which have risen significantly in recent months. From a performance perspective, everything is proceeding as planned, but perhaps the market expected us to beat forecasts even more." To be fair, Monday was performing exceptionally well.
But… Wall Street was right, and we would see how at the end of the next financial year. In Q2 2025, they beat revenue expectations, and reached 299 million, growth of 29%. But growth slowed among small businesses, their core market. Monday said this was thanks to Google algorithm changes, like the new AI overviews dropping traffic. But nonetheless, investors were growing concerned. So they pushed: [Brent Thill, Jefferies LLC]: "I think there are a lot of questions just as it relates to the Google change and what percent that impacted your business if you think about just x, y, z percent covered in this category from Google." CEO Eran Zinman responded saying:
"I don't exactly, I don't control, we don't control, exactly, Google will play this out, how the world is going to be. So we're trying to understand what the implications are." Then another question: [Matthew Bullock, Equity Research Analyst, Bank of America Merrill Lynch]: "And then help us understand, why call this out now? How did the influence of Google SEO disruption change this quarter versus 1Q, for example?" [Eran Zinman]: So look, I think like we said, we optimize in real-time. We just budget daily. This seems to imply they were not aware of the problem until they saw Q2 results. But a reminder during all this… Monday had beaten projections.
Only by about 7 million, but still. Growth was ahead of expectations. Unfortunately, stock performance is more about the future than anything else. So the stock dropped 26%. Something was happening… The SaaS world was changing. For now, Monday had to ease concerns. So to combat the doubt, in September 2025, on Analyst and Investors Day they made a big promise. $1.8 billion in annual revenue by 2027. Current annual revenue was 1.2 billion. That's a big leap given their market saturation. And they knew it. Because a few months later, they pulled back these expectations.
From $1.8 billion to about $1.45 billion. Slower growth of 18-19% versus 27% in 2025. Monday said it was due to "choppiness in the no-touch demand environment", along with longer enterprise sales cycles. Investors were not happy, sending the stock down 21% in a single day. When you promise one thing, then change your mind, people get annoyed, especially if that promise made people invest. But it was about to get way worse. Multiple law firms came forward with class action lawsuits, each alleging that management hid slowing customer growth, weaker expansions, and longer sales cycles, making the $1.8 billion target unrealistic, yet executives still publicly reaffirmed it as conditions worsened.
"Companies that make specific promises to investors about future performance have an obligation to disclose known risks to those projections. The gap between what monday.com projected in September and what it disclosed in February raises important questions about what was known and when." But there's a bigger question. Why was Monday's growth slowing down? As it turns out, it wasn't just them. The entire industry was going through a metamorphosis. On February 5, 2026, about $285 billion was wiped from software stocks in just 48 hours. (Show all the stocks falling). Salesforce fell over 30%, Workday dropped 33%, HubSpot 39%, Figma 40%.
Roughly $2 trillion in market value over the past year. And of course, that includes Monday. ⚠️ From a peak of $16 billion, they're now worth less than $3.4 billion. People are calling it the "SaaSpocalypse". Small and medium-sized customers are hugely pulling back from the market. Why? AI. Many companies are leaving these tools, and those that aren't, are paying for fewer seats. Tools like ChatGPT, Cursor, and Claude Code let companies build, essentially their own internal tools. It might not be ready to ship, but to the company, who cares? It works as an internal tool for management.
For the first time, Atlassian, the giant of these enterprise platforms, reported fewer enterprise seats. So, what is Monday doing about it? They're essentially killing the seat-based business model. And it is changing from a "work management platform" to an "AI Work Platform." A platform for automation, AI credits and AI agents. From per-seat pricing to per-credit pricing. They're also changing their core product, boards, the spreadsheet grid for tracking work, to different agents. Monday Sidekick,
Magic, Vibe, all about agents. Might sound annoying, another company pivoting to AI. But for Monday, their market is speaking pretty clearly. Their business model no longer works. They have to change, or they'll disappear entirely. I also do respect Eran Zinman. He still holds about 80% of his shares since the IPO, he isn't cashing out and abandoning ship, he's trying to figure out how to solve this new problem.
Another company tool struggling is Slack, but for totally different reasons to Monday. They used to be dominating, but despite being the better product, ended up losing. Click here to learn the rest of the story.
