If you’re curious about how Asana generates revenue, you’ve come to the right place. The purpose of this blog post is for you to learn more about their business models and gain insight into how they generate revenue.
So how do Asanas make money? Asanas operate on a freemium-based revenue-sharing platform. Asanas make money via pay monthly subscriptions categorized into three tiers: premium, businesses, and enterprises. Each one of these tiers offers a unique set of features and customization options.
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About Asana
Asana is one of the most popular task management tools on the web. Start-ups use it to help teams collaborate and manage projects. It’s become a favorite tool for start-ups to organize their tasks.
Remote working has become commonplace for business owners who want their staff to be able to work from anywhere at any time.
Asana is an online project tracking tool used by companies for managing projects. It helps teams collaborate effectively and efficiently.
Business Model of Asana
We’ve reviewed Asana’s business model and have broken it down into its components so we can understand what makes them unique and why they’re able to stay profitable in an increasingly crowded market.
Asana’s business strategy revolves around providing tools for managing projects and ensuring they stay aligned. By making it easy for teams to track their progress and collaborate, Asana enables them to accomplish more than ever before.
Remote work has become an important part of business operations due to the COVID-19 pandemic, which TIME named “the world’s largest work-from-home experiment.”
With its comprehensive platform, Asana is well positioned to compete in this growing segment of the cloud productivity software industry.
Developed by Facebook veteran Dustin Moskovitz and former Google employee Justin Rosenstein, Asana’s value proposition revolves around its core Work Graph functionality, which enables teams to coordinate their activities.
Asana’s platform can be utilized by organizations ranging from small startups with a handful of employees to fully-staffed enterprises with hundreds of workers.
Asana’s Work Graph
With Asana’s new Task List view, you can easily see which projects you haven’t completed yet.
A description of the different parts of the business, how they fit together, and who works where is then added to the Work Graph.
With Asana’s software, users can:
- Set up tasks that can be assigned to owners with due dates. Attach relevant documents and add extra info to the task description using the task’s own field. These fields help explain the task content.
- Collect tasks into project plans. A plan for a project can help teams repeat successful practices and avoid mistakes.
- Create a project management system so that managers can keep an eye on their employees’ progress.
- Goals – for example, Objective and Key Results (OKRs) can help establish and link to the relevant project and portfolio goals, with the option to show these at any time.
The software helps individuals accomplish tasks better than they could alone, while also helping managers and supervisors see how employees are performing at any given time.
Automated tools allow for routine tasks to be performed automatically without requiring any human intervention.
With Asana’s extensive range of third-party integrations, you can use Asana for almost any type of project management task.
Third-party apps can be added to platforms by using Asana Connect.
Cost of Running Asana
Asana’s monthly fee-based business model means that most of its operating expenses come from the cost of providing the service to free users. For example, personnel-associated expenses, advertising expenses, and additional third parties’ hosting services.
R&D ensures that Asana continues to offer new features and improvements so that its products remain at the forefront of the market.
Asana’s goal is to grow its customer base by expanding into new markets and developing products for existing markets.
Direct marketing and self-service allow Asana to grow its user base faster than through organic means.
How Does Asana Make Money?
Asana’s core Work Graph features drive the freezer perineurial business model, as free users are channeled through marketing funnels eventually to become paid members.
Asana’s primary source of revenue comes from three different plans: Premium, Business, and Enterprise.
You can add additional features to those included in the free version by purchasing one of these three subscription plans.
Premium Subscription Fees
Asana’s premium-level plan adds additional features not available in the basic plan. It offers more flexibility for teams than the free version.
With unlimited dashboards and project management tools, this is an excellent choice for large companies with multiple teams.
Additional features available include:
- Timeline
- Custom fields
- Forms and rules
- Admin Console
Business Subscription Fees
Asana launched its business subscription service in November 2018 and is aimed at organizations that need to manage work across multiple projects.
The premium version includes additional tools including:
- Portfolios
- Workload
- Approvals
- Proofing
- Salesforce, Tableaus, Power Bi, and Adobes creative cloud integrations
Enterprise Subscription Fees
Asana’s enterprise subscription represents the complete product suite and is tailor-made for businesses looking for full control with added security and support.
This subscription tier includes:
- SAML
- User provisioning and de-provisioning (SCIM)
- Data export and deletion
- Block native integrations
- Custom branding
- Priority support
According to Asana’s most recent quarterly report, 42 percent of its revenue came from business and enterprise accounts. Subscribers who spend over $5K annually accounted for more than 54 percent of Asana’s total revenue. Most of these subscribers pay their bills on an annual basis.
Asana Funding, Valuation & Revenue
Asana reported strong revenue growth in its latest quarterly earnings report. Its founder and CEO, Dustin Moskovitz explained the reasons behind this growth.
The most interesting of these was an increase in new customer signups, which grew by 50% year-over-year.
With over 93,000 paid customers and over 1.6 million paid users, Asana helps companies manage projects, collaborate across teams, and get things done.
Additional financial highlights for the company’s 2019–2021 fiscal year include:
Asana has grown across a wide variety of metrics and has been recognized for its excellence by a large group of companies. It was recently named one of the best workplaces in America by Glassdoor and Fortune magazine.
Spending by customers has increased at both the $5,000 annual and $50,000+ annual ranges.
Asana’s rise in valuation is further reflected in its increasing share price. Following its IPO in September 2019, Asana was worth $5.5 billion. On August 11th, 2021, Asana’s market cap had risen to $11.8 billion.
Asana has raised $453.2 million in venture capital financing from a group of investors including Sebastien Breteau (Manhattan Venture Partners), Silicon Valley Bank, and Peter Thiel.
Is Asana Profitable?
Asana isn’t profitable yet but has managed to generate revenue through investment in its business.
Asana spends a large portion of its budget on customer acquisition costs (sending emails, making phone calls) and product management costs (developing new products).
With its continued growth and consistent increase in share price, Asana has an excellent chance of outperforming most other companies in its industry.
With its expected continued growth through 2022, Asana expects its revenues to be between $309 million and $314 million.
Despite the fact that the project management software industry continues to be highly competitive, Asana has demonstrated its ability to thrive in this environment.
Asana continues to grow its revenues at an impressive rate, which indicates a bright outlook for the company going forward. The cloud and computing industry has been growing at a rapid pace, so there is no reason to think that Asana won’t continue to benefit from this trend.
Despite its substantial losses, Asana has built valuable technologies over the past few decades which satisfy an increasing need for digital project management tools.
At the basic subscription level, Asana has a large user base that could be used to attract new subscribers.
Conclusion: How Does Asana Make Money?
When we look at Asana’s pricing structure, it has a freemium model. It makes most of its income from its enterprise subscriptions, along with a small percentage of its revenues from its premium and enterprise products.
Users are free to download the basic version of the tool for personal use, but they will be restricted to a certain number of projects. For a small company, the monthly subscription is likely to be cheaper than hiring a full-time developer.
With so many big companies and VC firms already adopting Asana, it‘s not surprising that people are signing up in droves.
Asana has grown tremendously since its inception and continues to grow because of word of mouth and focus on the user experience. It has attracted investors, added innovative products, and attracted a new user base.
We’ve reached the end of this blog post, and we hope that it was especially useful for you in grasping how Asana generates revenue.
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