Despite Talk That "SaaS Is Dead": Linear Doubles Its Valuation to $2.5 Billion

Even as many predict that artificial intelligence will push SaaS (software-as-a-service) companies out of the market, Linear is bucking that trend. The startup, which builds a product management tool, has doubled its valuation to $2.5 billion, and its annual recurring revenue (ARR) has surpassed $100 million — a strong counterpoint to the popular narrative that traditional software companies are losing relevance because of AI.

"The narrative that every SaaS company is dying or no longer matters is always overly broad," Linear co-founder and CEO Karri Saarinen told Business Insider. "It really depends a lot on what kind of SaaS company you are." Linear completed a tender offer allowing employees to sell shares at a $2.5 billion valuation, led by Accel, with participation from existing investor 01A as well as new investors Salesforce Ventures and S32.

The deal was a secondary sale: $99 million went directly to employees rather than onto Linear's balance sheet. The new valuation also marks a doubling of the $1.25 billion reached in the company's Series C round, led by Accel, last year.

Linear's growth is being viewed as evidence in one of Silicon Valley's biggest debates — whether AI agents will replace SaaS companies or simply reshape their role. The company's position is that artificial intelligence isn't eliminating the need for its product but rather increasing the amount of work that needs to be organized. Linear's software is designed to give teams — and increasingly AI agents — a shared space to plan product work, assign tasks, and track what's being built.

"It's fundamentally a human coordination problem," Saarinen says, adding that a growing number of companies are turning to Linear to track spending on AI tokens. "It ties that cost to something meaningful for the company, which justifies it." Saarinen notes that Linear doesn't need new funding, since the company has been profitable since its second year and has positive cash flow — a rarity among fast-growing startups. Instead, the tender offer serves mainly as a tool for retaining employees amid stiff competition.

"The talent market is extremely competitive right now," she says. "There are public companies with equity programs and large AI companies offering high salaries, so this is one of the ways we retain our people." Linear's roughly 40,000 paying customers include companies such as OpenAI, Salesforce, Cursor, Coinbase, Figma, Ramp, Yahoo, and Oscar Health. But the market is getting more crowded: beyond AI-driven coding and productivity startups, Linear also has to compete with Atlassian's Jira as well as established rivals like Asana, Monday.com, and Notion.