Notion Hits $500M ARR, Debuts AI Agent

OpenAI’s ChatGPT launch in November 2022 ignited the generative AI revolution, a force shaping the tech landscape nearly three years later. Companies large and small are scrambling to harness its power, leading to unprecedented innovation and investment.

Notion recognized and responded early to the seismic shift.

Preceding ChatGPT’s release by just two weeks, the productivity software startup unveiled Notion AI, leveraging an OpenAI model to create an intelligent “writing assistant” designed to facilitate brainstorming, editing, and summarization, the company stated.

“We’re at an important inflection point,” CEO Ivan Zhao noted in a blog post, emphasizing the “exponential” potential of artificial intelligence and its continued growth trajectory.

This strategic embrace of AI has propelled Notion’s annualized revenue past the $500 million mark, earning it the 34th spot on the CNBC Disruptor 50 list for 2025. Further solidifying its AI-driven strategy, Notion recently introduced a customizable agent capable of synthesizing data from diverse sources to generate documents, utilizing models from leading AI providers like OpenAI and Anthropic. This signifies a move beyond simple chatbot functionalities towards more sophisticated, automated workflows.

Akshay Kothari, Notion’s co-founder and operating chief, affirmed in a recent interview the company’s commitment to meeting the surging enterprise demand for AI-powered tools. Notable corporate clients utilizing Notion’s platform include Kaiser Permanente, Mitsubishi Heavy Industries, Nvidia, and Volvo Cars, demonstrating its appeal across diverse industries.

“We’re doubling this year and likely going to double the sales team next year,” Kothari stated, highlighting the rapid expansion fueled by AI adoption. He also emphasized the collaborative nature of the platform, noting that approximately 90% of their business stems from “multiplayer usage,” or teams of workers.

Founded in 2013, two years before OpenAI’s inception as a nonprofit AI lab, Notion launched its initial product version in 2016 and boasts over 100 million users today, signifying significant market penetration.

Unlike many startups riding the generative AI wave, Notion hasn’t sought external funding recently. Their last fundraising round, dating back to 2021, capitalized on the surge in demand for cloud-based collaboration tools driven by the Covid-19 pandemic and the rise of remote work. That October, Notion secured $275 million, cementing a $10 billion valuation. This points to a potential strategy of prioritizing sustainable growth and profitability over rapid expansion through external capital. Many companies are choosing to focus on retaining equity while scaling their solution.

Kothari revealed that the company’s cash reserves exceed the $330 million raised to date, indicating a strong financial position and the capacity for continued internal investment in AI development and product innovation.

Following the May introduction of AI-powered features for meeting summarization and corporate file search, Notion has experienced accelerated annual revenue growth each month, according to Kothari, though specific growth rates remain undisclosed. This is consistent with the trend in the industry seeing the real-world application of AI leading to direct revenue growth.

The latest announcement includes a preview of custom agents, designed to automate tasks in the background. For instance, a custom agent could be programmed to curate and distribute a weekly list of articles tailored to a user’s specific interests. The possibilities for these agents are seemingly limitless and could unlock further workflow efficiencies for enterprises.

Kothari stated that the adoption of paid AI add-ons has surged from 10%-20% of Notion customers last year to over 50% recently. This increased adoption led Notion to integrate core AI functionalities into its business and enterprise plans at no extra cost. The company is actively collaborating with clients to develop a fair pricing structure for the more advanced custom agents, suggesting a tiered pricing approach that could maximize its revenue potential while meeting diverse client needs.

The productivity software market is intensely competitive, with industry giants like Microsoft and Google holding significant sway. These tech titans have the resources to integrate advanced AI functionalities into their established productivity suites, posing a direct challenge to Notion’s market share.

Shortly after Notion’s 2021 funding round, Microsoft unveiled Loop, a document collaboration app resembling Notion, which became available to Microsoft 365 subscribers in 2023. This underscores the increasing convergence of productivity tools and the pressure on Notion to continuously innovate to maintain its competitive edge. Microsoft is further bolstering its productivity suite with Copilot, an AI assistant capable of generating Word documents and Outlook emails. Meanwhile, Google offers its Gemini AI within Google Workspace applications.

Ramp, a business credit card startup, leverages Google Workspace and the Gemini AI option but has actively encouraged its employees to migrate documents and project tracking to Notion, according to Ben Levick, Ramp’s head of operations. This migration is because of the improved productivity and enhanced features that Notion offers.

Levick reported that 90% of Ramp’s 1,200-person workforce uses Notion’s AI features monthly. They are actively testing custom agents to automate internal inquiries and to synthesize sales feedback for integration into future product development. This illustrates how enterprises are exploring Notion’s custom agents to streamline internal processes and improve responsiveness to customer feedback, showcasing the transformative potential of these AI-powered tools.