Source: Sequoia Capital recently bought shares of online automation firm Zapier from its founders on the secondary market, with the sale valuing Zapier at $4B+
Zapier isn't a household name in Silicon Valley, but the world's top venture capitalists have long been trying to own a piece of the booming enterprise software firm.
The InformationKate Clark
Context & Ripple Effects
Zapier had spent years as the automation firm VCs couldn't get into — The Information notes top firms 'long' tried to own a piece — so Sequoia's route was the secondary market: buying shares directly from the founders rather than leading a primary round. A follow-up interview with Zapier's CEO confirmed Sequoia and Steadfast Financial's January secondary investment and paired it with Zapier's acquisition of no-code education business Makerpad, signaling the capital came with an ecosystem agenda.
The move also fits Sequoia's broader pattern of building positions through secondaries instead of waiting for primaries or IPOs — the same firm later offered to buy up to $861M of Stripe shares from its own LPs, and stood to make hundreds of millions when Stripe's Bridge acquisition paid out.
First-order effects
Zapier's founders convert paper wealth into cash without an IPO or new dilution, while Sequoia finally secures the stake in the $4B+ enterprise automation firm it had chased for years.
Second-order effects
The deal validates secondaries as Sequoia's preferred entry into profitable late-stage software — a playbook it repeated by offering to repurchase Stripe shares from LPs — pressuring other funds to offer founder liquidity early or miss out on allocations entirely.
Third-order effects
If the pattern holds, secondaries become a structural substitute for public listings: top firms concentrate ownership of proven winners like Zapier and Stripe while those companies stay private longer, widening the gap between private marks and actual liquidity.
The trend: Top venture firms are increasingly bypassing primary rounds and IPOs altogether, using secondary purchases to build concentrated positions in profitable software companies on their own terms.
Zapier versus IFTTT is another example of being early is the same as being wrong. Some may be surprised that the “no code” movement was building IFTTT & Yahoo Pipes for small business. More proof there's money in mundane automation for businesses. https://www.theinformation.com/ …
Scoop: A recent Sequoia secondary investment in Zapier valued the company at over $4 billion. It's quite the achievement for the enterprise software startup, which has raised just one round of venture capital, a $1.3 million seed in 2012. https://www.theinformation.com/ ...
New: FINALLY a new investor—@sequoia, naturally—got into one of the most important software startups you've probably never heard of—@zapier. Investors been banging on the 🪟 of this co. for years. https://www.theinformation.com/ ... by @KateClarkTweets
$4 billion valuation, and only selling secondary shares. 😳 @zapier is a such a screamin' good company. Congrats @wadefoster! https://www.theinformation.com/ ...
What an impressive business @zapier is! - a valuation close to $4B - 100% remote since day one - close to $100M ARR - only $1.3M raised - profitable for the last 6 years Sequoia Capital just bought shares from Zapier founders in the secondary market https://www.theinformation.com…
I really wonder why more entrepreneurs don't do this. In recent years, I've witnessed companies raise only to raise again 8 months later “opportunistically”, but having almost all of that raise available by the time they hit a b/c. Why dilute yourself out of fear? https://twitter…