Few topics garner cheers and groans quite as quickly as the no-code software explosion.

While investors seem uniformly bullish on toolsets that streamline and automate processes that once required a decent amount of technical know-how, not everyone seems to think that the product class is much of a new phenomenon.

On one hand, basic tools like Microsoft Excel have long given non-technical users a path toward carrying out complex tasks. (There’s historical precedent for the perspective.) On the other, a recent bout of low-code/no-code startups reaching huge valuations is too noteworthy to ignore, spanning apps like Notion, Airtable and Coda.

The TechCrunch team was interested in digging in to what defines the latest iteration of no-code and which industries might be the next target for entrepreneurs in the space. To get an answer on what is driving investor enthusiasm behind no-code, we reached out to a handful of investors who have explored the space:

As usual, we’re going to pull out some of the key trends and themes we identified from the group’s collected answers, after which we’ll share their responses at length, edited lightly for clarity and formatting.

Trends, themes

Our investor participants agreed that low-code/no-code apps haven’t reached their peak potential, but there was some disagreement in how universal their appeal will prove to various industries. “Every trend is overhyped in some way. Low-code/no-code apps hold a lot of promise in some areas but not all,” Lightspeed’s Raviraj Jain told us.

Meanwhile, Gradient’s Darian Shirazi said “any and all” industries could benefit from increased no-code/low-code toolsets. We can see it either way, frankly.

CapitalG’s Laela Sturdy says the breadth of appeal boils down to finding which industries face the biggest supply constraints of technical talent.

“There just isn’t enough IT talent out there to meet demand, and issues like security and maintenance take up most of the IT department’s time. If business users want to create new systems, they have to wait months or in most cases, years, to see their needs met,” she wrote. “No-code changes the equation because it empowers business users to take change into their own hands and to accomplish goals themselves.”

Mayfield’s Rajeev Batra agreed, saying it would be cool “to see not twenty million developers [building] really cool software but two, three hundred million people developing really cool, interesting software.” If that winds up being the case, the sheer number of monthly-actives in the no and low-code spaces would imply a huge revenue base for the startup category.

That makes a wager on platforms in the space somewhat obvious.

And those bets are being placed. On the topic of valuations and developer interest, our collected interviewees were largely bullish on startup prices (competitive) and VC demand (strong) when it comes to no-code fundraising today.

Sturdy added that the number of early-stage companies in the category “are being funded at an accelerating pace,” noting that her firm is “excitedly watching this young cohort of emerging no-code companies and intend to invest in the trend for years to come.” So, we’re not about to run short of fodder for more Series A and B rounds in the space.

Taken as a whole, like it or not, the no and low-code startup trend appears firm from both a market-fit perspective and from the perspective of investor interest. Now, the rest of the notes.

Laela Sturdy, general partner, CapitalG

We’ve seen some skepticism in the market that the low-code/no-code trend has earned its current hype, or product category. Do you agree that the product trend is overhyped, or misclassified? 

I don’t think it’s over-hyped, but I believe it’s often misunderstood. No code/low code has been around for a long time. Many of us have been using Microsoft Excel as a low-code tool for decades, but the market has caught fire recently due to an increase in applicable use cases and a ton of innovation in the capabilities of these new low-code/no-code platforms, specifically around their ease of use, the level and type of abstractions they can perform and their extensibility/connectivity into other parts of a company’s tech stack. On the demand side, the need for digital transformation is at an all-time high and cannot be met with incumbent tech platforms, especially given the shortage of technical workers. Low-code/no-code tools have stepped in to fill this void by enabling knowledge workers — who are 10x more populous than technical workers — to configure software without having to code. This has the potential to save significant time and money and to enable end-to-end digital experiences inside of enterprises faster.

What other opportunities does the proliferation of low-code/no-code programs open up when it comes to technical and non-technical folks working more closely together?

This is where things get exciting. If you look at large businesses today, IT departments and business units are perpetually out of alignment because IT teams are resource constrained and unable to address core business needs quickly enough. There just isn’t enough IT talent out there to meet demand, and issues like security and maintenance take up most of the IT department’s time. If business users want to create new systems, they have to wait months or in most cases years to see their needs met. No-code changes the equation because it empowers business users to take change into their own hands and to accomplish goals themselves. The rapid state of digital transformation — which has only been expedited by the pandemic — requires more business logic to be encoded into automations and applications. No code is making this transition possible for many enterprises.