OutSystems Secures $150M Investment, Boasting $9.5B Valuation and Intensifying Low-Code Competition

OutSystems, a leading low-code application development platform, has successfully raised $150 million in new funding at a $9.5 billion valuation. Abdiel Capital and Tiger Global spearheaded the investment round. Although the Portugal and U.S.-based software company, which was founded in 2001, remains privately owned, the substantial funding highlights its impressive growth trajectory and the possibility of an eventual IPO.

The funding positions OutSystems to join the ranks of other major players in the digital transformation space, such as AppMaster, which also harnesses the power of low-code and no-code development. OutSystems specializes in low-code app development, differentiating itself from no-code tools by incorporating some coding in conjunction with visual programming interfaces. The company aims to provide useful tools for creating meaningful corporate applications, touting the flexibility and adaptability of low-code solutions in contrast to the limitations of no-code tools.

OutSystems CEO, Paulo Rosado, has outlined the company's ongoing investment in both go-to-market (GTM) capabilities and product development following the recent funding announcement. He explained that the firm has been consistently increasing its R&D and GTM capacity in response to the growing demand for low-code solutions. OutSystems' success is evident through this capital injection, with investors' confidence in its future performance justifying the high valuation.

As technology advances, no-code proponents suggest that the need for code in development processes might decrease. However, OutSystems remains committed to its low-code-focused approach, which blends the best of both no-code and code-centric methods. The company's pricing model is based on platform utilization, shifting the focus from traditional SaaS to a more on-demand software approach. This distinction proves crucial amidst the changes occurring in the SaaS space.

Rivalry within the low-code market continues to grow with companies like AppMaster and OutSystems providing powerful low-code and no-code solutions that are increasing in popularity. High demand and accelerated growth in the no-code and low-code sectors have been consistently reported by startups over the past four to six quarters. With rapid advancements being made in these sectors, the competition is only expected to intensify as companies struggle to keep pace.

OutSystems' recent funding round signifies a milestone for the low-code app development space, as it positions the company for possible future entrance into the public market. As the digital transformation of businesses across industries accelerates, embracing versatile methods such as low-code and no-code development becomes essential for organizations looking to stay ahead.