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Website Builder Webflow Hits $4 Billion Valuation As It Nears $100 Million Revenue – Forbes

Webflow’s founders are chief experience officer Sergie Magdalin, CEO Vlad Magdalin and chief technology Bryant Chou.

Vlad Magdalin says he’s been getting odd looks at Starbucks in recent weeks when he tells the baristas his first name. But he has no reservations about the war in Ukraine initiated by the man who shares that name—the day the invasion began, Magdalin renounced his dual Russian citizenship. Webflow, the website-building startup of which he is CEO, is no longer doing business in Russia. A number of Ukrainian relief efforts, too, have launched using its “no code” tool that allows anyone to create a professional website without having coding skills.

It’s amid this “surreal” backdrop that Magdalin, who is of part Ukrainian, part Russian heritage, is announcing a new funding round for his company. “You kind of have to give yourself permission to hold both realities,” he says. Webflow said Wednesday that it raised $120 million in a Series C round led by Y Combinator Continuity, with participation from existing investors including CapitalG and Accel. The round raises the San Francisco-based startup’s valuation to $4 billion and comes as it is on track to hit $100 million annual recurring revenue within a month.

Webflow was founded in 2012 by Magdalin and his brother Sergie—religious refugees who moved from Russia as children—as well as their friend Bryant Chou. After narrowly avoiding bankruptcy in its early days, the company capitalized on growing buzz in “no code” software and were accepted into Y Combinator’s accelerator. But after taking $2.9 million in seed funding in 2014, the trio chose to hunker down and bootstrap the company until it became self-sustaining. “I was freaked out about this idea of venture capital coming in to destroy companies,” says Magdalin, who by 2019 had led Webflow to profitability and more than $10 million in annualized revenue.

When he raised his Series A round that year, Magdalin devised what he calls “a social contract” that any prospective investor had to agree to in order for him to accept their money.

It stipulates in writing that they must agree to prioritize Webflow’s mission and its employees above its revenue. “Sometimes I’d share that thing with investors up front and I’d never hear from them again,” Magdalin says. Those who agreed are beginning to see the rewards of their conviction. Webflow now has more than 200,000 customers and is starting to see new streams of revenue from bets that it took years ago—investing in things that don’t generate revenue right away is a core tenet of the mission Magdalin speaks of in his contract.

One example is a tool for users to create animations. While the feature is not a necessity for most people launching a website, Magdalin says that over time, Webflow saw an uptick of new customers who discovered it as a result of the animations, which include a badge labeled “Made in Webflow.” The startup is also starting to see accelerated growth in its business selling to enterprise companies like Univision and PwC. Over the course of last year, revenue in this segment grew to $8 million from about $1 million, Magdalin says.

The new funding will go toward more product development on long-term bets, Magdalin says. He sees Webflow growing in two to three years into a “no code” tool not only to build websites, but also software applications. “We want to turn any knowledge worker into a potential developer so that they are developing software, but they don’t necessarily have to know how to write the code to do it,” Magdalin says. “Websites are our beachhead to expand into that larger space.”

Webflow is also setting aside $10 million from the new round for grants to users creating resources or holding events to help other people use Webflow. The company now has 400 employees and $335 million in total capital raised; enough of the money from past funding rounds is still in the bank, Magdalin says, that the company can self-sustain for at least four years. In the event of an extended market downturn, the new capital can help Webflow survive or strengthen itself through business acquisitions, says Rowghani, who is joining the board as part of the raise. Magdalin says there are no plans to take the company to an IPO anytime soon, and his new investor affirms that he shouldn’t feel any pressure to rush despite competitors like website builder Wix and e-commerce company Shopify already being public. “There are certain companies where they become huge simply because the [total addressable market] is huge,” Rowghani says. “One of the nice things about this market is that we don’t have to worry that much about competition.”

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Where Tech Talent Goes To Thrive

here is a worldwide shortage of digital skills. In a world increasingly reliant on technology, demand for technological skillsets is rising by as much as 50%. Meanwhile, nearly three-quarters of today’s workers don’t feel equipped to learn the digital skills needed by businesses.

The most acute shortage is in advanced skills like programming, especially for new technologies like AI and blockchain.

This demand gives skilled tech workers, entrepreneurs, and leaders the pick of where to base themselves. As cities and nations compete to attract tech talent, what makes these prized individuals choose one place over another?.

Initial Attraction
In a survey of ‘tech migrants’, Boston Consulting Group identified a mixture of short-, medium-, and long-term levers businesses and cities could use to attract talent.

The initial attraction is often brute economics: higher pay and lower taxes. That’s certainly what brings people to Dubai, says Vladimir Vrzhovski, Tech and Digital Lead at Mercer: “Dubai pays about 30% higher than most of the mature tech hubs around Europe and Asia.” It also has a lower cost of living, especially when its 0% income tax is taken into account.

Businesses operating in the city’s free zones – like the tech-focused Dubai Internet City (DIC) and Dubai International Finance Centre (DIFC) Innovation Hub – also benefit from 0% corporation tax. BCG credits the incentive with bringing big names like Amazon, Google, and Oracle to the emirate.

It is an echo of London’s rise to tech prominence, offering tax relief on tech investments via its Seed Enterprise Investment Scheme (SEIS) to funnel the city’s vast pools of finance towards digital businesses.

The presence of blue-chip names affords another major draw for tech talent: opportunities.

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Adding exercise into treatment may reduce substance use, study shows

One key to fighting addiction may be exercise, according to a new study.

Researchers undertook a review of the existing literature around physical activity and its relationship to substance use, and they found that regular exercise was associated with lowered use in about 75% of the studies investigating that question, according to the analysis.

The review, published Wednesday in the journal PLOS ONE, looked at 43 studies with more than 3,000 total participants. In addition to a reduction or cessation in substance use, the studies also found improved markers of physical health and decreased depressive symptoms, the study said.

“People think that during treatment people should only do psychotherapeutic treatments … but that’s not what we’ve seen in our study,” said lead study author Florence Piché, a doctoral student and researcher at Université de Montréal in Canada. “It’s very beneficial to do physical activity in addition to the treatments.”

There are limitations to the findings. The review found that most of the studies the researchers examined had a high risk of bias, meaning more research is needed to confirm their findings, said Dr. Aaron Kandola, research fellow at Medical Research Council Unit for Lifelong Health and Ageing at University College London.

The studies were also not directly comparable enough to build a comprehensive and generalizable understanding of the relationship, Kandola said in an email. Kandola was not part of the research.

However, the findings were still significant and useful, he added.

“Substance use disorders are a major public health problem lacking low-cost, evidence-based solutions,” he said, adding that substance use disorders are worsening in many high-income countries — including the United States.

Finding more accessible solutions to this disorder is especially important because it often occurs with other mental health problems such as depression and anxiety, which disproportionately affect people with fewer socioeconomic resources and areas with higher deprivation, he said.

Physical activity may be a useful and accessible part of a treatment plan for substance use disorder, said Dr. Mark Smith, professor of psychology at Davidson College in North Carolina. Smith was not part of the research.

“I think there’s now a sufficient amount of data to indicate that various forms of physical activity and exercise are generally effective at reducing substance use in individuals seeking treatment,” he said.

What exercise does
Most people can benefit from engaging in physical activity, Kandola said.

One benefit the studies found is improvements in physical health such as cardiovascular endurance or muscle strength, Smith said. And although that may not be the primary goal of the research, he said this finding is important because it shows the physical activity is doing its job to promote physical health.

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Blood sugar drug tirzepatide also leads to substantial weight loss in diabetes patients, Eli Lilly says

There’s more evidence that the injectable drug tirzepatide helps people with diabetes lose weight as well as control their blood sugar, according to the drug’s manufacturer, Eli Lilly and Company.

In a new study, more than 900 adults with obesity and diabetes took the drug for a year and five months, and those on the highest dose lost an average of 34 pounds, or nearly 16% of their starting weight. It also helped people reduce their blood sugar, the company said in a news release. The data has not yet been peer-reviewed or published in a medical journal.

“We have not hit 15% in any other phase three trial for weight management in this type two diabetes population,” said Dr. Nadia Ahmad, an associate vice president at Eli Lilly and medical director of obesity clinical development for the company.

Ahmad said the company was pleased with these results, given how hard it is for people with type 2 diabetes to lose weight.

Tirzepatide is currently sold as Mounjaro and approved to help people with type 2 diabetes control their blood sugar.

Lilly says it will use the new study, along with results from an earlier study of weight loss in people without diabetes, to ask the US Food and Drug Administration to fast-track approval for tirzepatide purely for weight loss, which would make it a direct competitor to the blockbuster obesity drug Wegovy.

Plenty of people aren’t waiting for the FDA’s nod.

“I am aware of and I’ve heard, you know, it being sort of used off label for weight loss and individuals who do not have diabetes,” said Dr. Kimberly Gudzune, medical director of the American Board of Obesity Medicine. Gudzune was not involved in the tirzepatide study.

Gudzune points out that once a drug is FDA approved it can be prescribed for any reason a doctor sees as medically necessary.

Tirzepatide, along with several similar types of drugs taken for diabetes, went into shortage last year as success stories posted on social media fueled runaway demand for their weight loss benefits. The shortages made the medications difficult for patients with diabetes to get.

Tirzepatide works by mimicking the action of two different gut hormones. When blood sugar rises after eating, the drug stimulates the body to produce more insulin, which lowers blood sugar. It also slows down the movement of food from the stomach, making people feel fuller for longer. In clinical trials, people who took tirzepatide experienced more nausea, vomiting and diarrhea compared with those who took a placebo injection.

Semaglutide, manufactured by Novo Nordisk, has also been approved as a weight loss medication for overweight adults with at least one associated health problem since 2021. When prescribed for weight loss, it is sold under the brand name Wegovy. When prescribed for diabetes, the injection is sold under the brand name Ozempic.

High demand, coupled with manufacturing problems, threw Wegovy into shortage for much of the last year. That shortage then rippled into shortages for diabetes patients as doctors began prescribing other diabetes medications off-label for weight loss.

There has already been a lot of buzz about tirzepatide’s potential as an obesity medication. In a clinical trial published in the New England Journal of Medicine last year, people who were overweight or obese, but did not have diabetes, lost an average of 52 pounds on the highest dose of the drug, or more than 20% of their starting weight.

“In the last year has been really exciting just to have more tools in the toolbox, so to speak. And tools that, you know, we’re seeing really achieving outcomes that patients for the longest time have been hoping to achieve,” Gudzune said.

If those results hold up in the real world, that would make it the most potent of the injectable weight loss medications.

Indeed, this week Lilly aims to begin a study that will test Mounjaro against Wegovy head-to-head in 700 participants at 61 sites in the United States and Canada, according to clinicaltrials.gov. The study will conclude in February 2025.

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