Balloon’s current funding round has a valuation cap of $12 million. The company saw revenue of $231,610 in 2021, which is a 600% increase from the previous year. Balloon is currently  pre-profit, but it has a past record of serving impressive clients that would aid in its future financial growth. The company’s revenue-to-valuation multiple as of 2021 is average compared to the online communication and work platform industry averages. Overall, Balloon’s valuation is fair given its strong revenue growth, pre-profit status, and average revenue multiple.

Balloon operates in the broad-ranging US collaboration software market. Collaboration software allows for easy sharing and management of files and data types across many users and systems. Revenue from collaboration software sales is forecasted to reach $16.7 billion by the end of 2022. The industry, however, has suffered from a below-average projected growth rate of 2.3% annually since 2015. This low growth rate may be offset in the coming years by increased adoption of remote work and hybrid workplaces. 

While collaboration software is a broad market, there are many well-established companies in this sector. Balloon will benefit from the market’s spread across many industries, but it seems unlikely to secure market dominance as a general software-as-a-service product. If Balloon positions itself as leaders of the remote diversity-, equity-, and inclusion-based decision-making space, it could act as true thought leaders. Overall, Balloon looks fairly well positioned to secure a decent and growing niche of the market through its team-oriented and democratic decision-making support product features. 

Balloon co-founder and CEO Amanda Greenberg is an experienced writer and researcher focused on public health issues. Greenberg has an extensive background in public health communications and policy practices used in private and public spaces. It’s unclear how public health expertise translates to building a platform for business collaboration and decision-making. Greenberg also does not have high level managerial experience to fall back on as a CEO now. 

Noah Bornstein, co-founder and CTO of Balloon, is an experienced technology engineer and developer. Before Balloon, he was a user experience designer at IBM, a website design and development consultant for political parties, and a language-learning app developer. 

Balloon’s founders have noteworthy educational and technical experience. However, at this time they appear to be the only employees at Balloon. Despite complementary skill sets, they will need to build out their sales, legal, and marketing teams to truly scale Balloon in the coming years. 

The market for US collaboration software is crowded, and it can be difficult to determine qualities that distinguish one product or service from another. Competitors in the US collaboration software space include Notion, Slack, Trello, and Igloo, to name a few. These companies all focus on increasing collaboration in teams, though none have formalized decision-making processes as Balloon has. While Balloon is focused on improving efficiency and equity in decision-making, it’s not clear that this difference will be enough to overcome familiar legacy brands. If companies don’t view Balloon’s platform as a must-have, they might be resistant in adopting it and incorporating the platform into existing workflows.  

Additionally, Balloon’s technology for improved and more equitable decision-making can’t be patented. The entry barriers in these markets are also relatively low, leading to differentiator and defensibility concerns. It appears Balloon might struggle to stand out and defend its ideas among the fierce competition in this market.

Since its launch date, Balloon has demonstrated powerful traction through its well-known users and proven results. The company’s product boasts to reduce meeting time by 70% and cultivate fresh ideas, with more than 80% of the information shared on the platform tagged as brand new. Paying customers include major companies like Amazon, Masterclass, MLB, and Estee Lauder. These companies see high engagement with 78% participation from current users, which is high for collaboration software platforms. 

In 2021, Balloon had revenue of $231,610, which is a sharp 600% increase from the previous year. While this growth is impressive, the revenue is still rather low for a software-as-a-service company that has been operating since 2015. Its high burn rate might prove unsustainable unless the company is able to further increase its revenue. Fortunately, the company has proven its ability to raise capital. Balloon’s past $2.6 million raise has been instrumental in the company’s development and growth measures. LAUNCH, Wavemaker, Streamlined Ventures, X Factor Ventures, and Imagination Capital have all funded Balloon to support future efforts. 

Balloon has strong user traction and is growing revenues through increased product adoption. If Balloon is able to expand its product more rapidly or further differentiate its offering compared to other companies in this space, it could rise above competitors given its results-oriented service.

Balloon’s overall risk level is low. However, it has small profitability, defensibility, differentiation, and team risks. The company was founded in 2015, but it has yet to achieve profitability. While it’s gradually increasing annual revenue, investors might be concerned that a software-as-a-service company hasn’t achieved profitability nearly seven years since its product launch. 

Defensibility and differentiation risks arise due to the competitive nature of the markets Balloon operates within. Balloon is unable to patent its technology at this point, making its service easy to replicate. Even if Balloon offers a superior product to its competitors, it can be difficult to stand out among established competitors and heavily used legacy brands. 

Finally, Balloon’s small team also raises growth concerns. While the founders are knowledgeable and well-respected in the industry, they might lack the necessary support to quickly scale Balloon. Additional teammates to support marketing, brand development, sales, and partnership efforts would likely help Balloon gain traction in the collaboration software market more quickly.

Balloon, at the time Balloonr, raised a SAFE round on Republic in 2019. At that time, it was rated a Top Deal by the KingsCrowd team. Its previous valuation cap was $7 million, which has now increased to $12 million. Given the company’s traction thus far, this $5 million increase seems to be reasonable.

Balloon’s product, list of customers, and revenue have experienced a small amount of growth since the company’s last round in 2019. Its annual revenue growth has increased significantly from 2019 to 2020, but its monthly burn remains high. Balloon also has yet to become profitable and establish the needed business partnerships for its growth and widespread adoption. Therefore, Balloon has been downgraded to a Neutral Deal.

Balloon’s biggest concerns are rooted in its competitors and small team. It operates in a very crowded market where users are often comfortable with the status quo. Name recognition is vital for adopting new customers and ensuring enthusiastic customer engagement. As a new company with a relatively similar service offering to its established competitors, Balloon could struggle to convert new customers. 

Furthermore, Balloon’s small team might not be strong enough to scale rapid production adoption. If Balloon fails to acquire the right customers, grow its marketing efforts, and develop product niches in a timely manner, the company’s limited bandwidth could ultimately result in poor returns for investors.

Balloon is gaining financial traction, creating loyal customers, and diversifying its service offerings. The company’s customer base has grown significantly since its launch and has established specific milestones to ensure continued growth. Competition in the US collaboration software market is fierce, but this is not a winner-takes-all industry. 

Balloon’s services are attractive for leaders, as they improve time efficiency, equity, and transparency in decision-making. The company’s focus on ease and inclusivity makes Balloon’s collaboration software more competitive and appealing to new users looking to engage teams and make meaningful decisions more quickly. With a strong executive leadership team, ample capital raised, and noteworthy paying users, Balloon could become a leader within the digital collaboration software space.

Balloon is transforming the way leaders engage their teams and make decisions. The platform encourages inclusion, equity, time efficiency, and democracy in decision-making. Balloon’s recent user, financial, and product growth is encouraging for investors as it establishes plans for expansion in the coming years. It has goals to offer services to other large companies, continue growing revenue, and expand its team. Its CEO and CTO boast complimentary skills that will support the growing company. The company’s current valuation is also very fair compared to industry averages. 

Despite this growth and plans for future development, there are some concerns for investors. Given the nature of this service, Balloon offers similar services to its competitors with little to prevent its few unique features from being recreated elsewhere. Operating within such a crowded market without patents and an extensive list of users leaves Balloon particularly vulnerable. Therefore, Balloon has been rated a Neutral Deal by the KingsCrowd investment team. 

For questions regarding the KingsCrowd analyst report or ratings for this company, please reach out to support@kingscrowd.com. 

Analysis written by Carolyn Price, March 5, 2022.