Low-Code and No-Code: Why You Shouldn't Dismiss Them

The Rise of Low-Code and No-Code Platforms

Current indications suggest that low-code and no-code services are demonstrating the shortcomings of previous approaches to developing broad-based products, including enterprise applications and AI-driven data analytics. This conclusion is supported by the strong performance of both publicly and privately held companies in these sectors.

The Exchange recently spoke with Appian CEO Matt Calkins following the release of his company’s first-quarter results. The discussion centered on the low-code market and prevailing customer feedback.

To further substantiate this viewpoint – and justify a somewhat assertive headline – a compilation of recent low-code and no-code venture capital investments has been assembled, revealing a significant trend.

Venture Capital Investment Trends

The speed at which venture capitalists are investing in companies within these two categories is notably high. This suggests a collective success within the sector.

Recent market conditions have shown that while some startups are attracting substantial funding, others are facing challenges in securing investment.

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A key differentiator is demonstrable traction. Rapidly growing startups are experiencing almost unrestricted access to capital. Conversely, companies with merely fast growth rates are often struggling to find investors.

Therefore, the substantial capital inflows into a diverse range of no-code and low-code startups indicate strong market demand for their offerings. The impressive growth of no-code automation platform Zapier, which has reached a scale comparable to an IPO, further supports this observation.

Additionally, Appian recently launched a new iteration of its low-code automation platform.

We will first examine insights from Appian’s CEO, followed by a review of recent venture capital activity in the space.

This analysis should provide valuable insights into the evolving landscape of low-code and no-code technologies.

Public Performance Analysis

Appian announced Q1 2021 revenue totaling $88.9 million, with $39.1 million originating from its cloud subscription services. This cloud subscription revenue experienced a substantial increase of 38% when compared to the same period last year.

Furthermore, Appian achieved adjusted EBITDA profitability during this period. Despite these positive results, the company’s stock experienced a significant decline following the announcement.

The share price fell from a range in the mid-$130s in April to the mid-$80s, although not all of this decrease occurred after the earnings report.

Focus on Low-Code Demand

The company’s guidance and investor expectations are less critical than the CEO’s insights into the low-code market. We aimed to determine whether Appian’s automation services or its low-code platform contributed more to the growth of its cloud subscription business.

According to CEO Matt Calkins, the primary driver of demand is not the automation tooling, but rather the low-code service itself.

Appian’s projection of 40% growth in cloud subscription revenue—a new high—is largely attributed to low-code application development, rather than automation initiatives.

Positive Outlook and Implications

The company reports a robust future pipeline, noting “continued growth [and a] healthy spending environment” in a recent press release.

The key takeaway from Appian’s quarterly performance is that the expansion of its growth business is accelerating, and this is being fueled by demand for low-code applications.

Some investors expressed concern over the company’s decision to allow partners to handle some of its lower-margin services revenue.

Broader Market Significance

This indicates that overall corporate demand for low-code development tools remains strong. Appian’s optimistic outlook on future sales cycles suggests that demand is not diminishing in the near term.

Considering this general trend, we can now turn our attention to the startup landscape.

Key Takeaway: The increasing demand for low-code solutions, as evidenced by Appian’s performance, signals a positive trajectory for the industry.

Low-Code vs. No-Code Development

Considering Calkins’ assessment of the market’s demand for low-code solutions, one might anticipate a surge of startups focused on similar offerings attracting substantial investment. Is this observation borne out by current trends?

Identifying startups specifically dedicated to no-code and low-code development within existing information databases presents a challenge. Therefore, this overview relies more heavily on a review of recently reported funding rounds for companies utilizing these software approaches. It’s important to note that no-code and low-code aren’t business models themselves, but rather product development philosophies. The majority of companies in this space operate as Software-as-a-Service (SaaS) providers.

Let's begin with a look at recent activity in the low-code arena:

• FintechOS, a company employing a “low-code approach” within the financial technology sector, recently secured $60 million in Series B funding. The company’s headquarters are located in London, a prominent global fintech center. (April 20, 2021)
• According to TechCrunch, n8n has raised $12M for its “fair code” methodology to low-code workflow automation. This positions the company firmly within the low-code landscape. The funding is particularly noteworthy as n8n is based in Berlin, rather than Silicon Valley. (April 26, 2021)
• Pliant, also operating in the low-code space, provides IT automation technology incorporating code-light functionalities. They recently completed a $10 million Series A funding round. (May 6, 2021)
• Airkit, which positions itself as offering the “world’s first low-code Digital Customer Experience platform,” has recently raised $40 million in Series B funding. This round is significant as Airkit previously raised $28 million just last October, representing a rapid second funding event. (May 11, 2021)
• Cycode, while not strictly a low-code company, announced the “release of a low-code query engine” as part of its $20 million Series A funding. This is a noteworthy addition to their offerings. (May 11, 2021)
• Further recent funding announcements have come from Crosser, Redwood Software, Spinwheel, and other companies offering low-code-enabled services.

This collection of funding rounds demonstrates a notable diversity of applications.

Fintech, developer tools, IT automation, and customer experience solutions are all leveraging low-code principles to address customer requirements. This highlights a key takeaway from the past year or two in this startup segment: the broad application of lower-code tooling to expand software accessibility to a wider user base, and to accelerate development cycles.

However, the potential for widespread adoption may be even greater with no-code software. What developments are occurring within the no-code startup ecosystem? Here’s a representative sample:

• Obviously AI recently secured a $3.6 million seed round for its “no-code tool that empowers anyone to create and deploy AI models in minutes,” as stated in their press release. (May 3, 2021)
• Pecan.ai successfully completed a $35 million funding round focused on no-code analytics. The company also boasts a particularly memorable name, which deserves mention. (May 5, 2021)
• Anvilogic raised $10 million recently to develop what VentureBeat described as “a collaborative, no-code platform that streamlines detection engineering workflows by assisting IT teams in evaluating cloud, web, network, and endpoint environments, and in building and deploying attack-pattern detection code.” This is a promising development. (May 11, 2021)

The list continues, but it’s clear that dismissing no-code and low-code services as sources of technical debt or uninspired development projects would be a mistake. The market suggests that such a view is both elitist and resistant to change.