Why Crosslink Capital Just Doubled Down on monday.com: A Deep Dive into a $40M Bet

2025-12-26 02:51:06

What’s the Trade Here?

In the third quarter, Crosslink Capital made a bold statement about monday.com, pouring an additional $20.55 million into the work management software company by acquiring 143,650 shares. This wasn’t a casual nibble—it brought their total position to 203,865 shares worth $39.49 million, representing 2.87% of their $1.37 billion in U.S. equity holdings as of September 30, 2025.

The timing is particularly interesting. Monday.com’s stock had tanked roughly 46% over the trailing year, opening what Crosslink Capital apparently viewed as a compelling entry point. When a fund with Crosslink’s track record is stepping up to buy more shares after a substantial drawdown, it’s worth asking: what do they see that the market is missing?

The Numbers Don’t Lie—Or Do They?

Let’s talk valuation. On the surface, monday.com looks cheap at 24 times free cash flow. But here’s where it gets nuanced: adjust for stock-based compensation and that multiple balloons to 48x—still respectable for a software company showing real momentum, but not a screaming bargain.

The company just delivered 26% sales growth in its most recent quarter, with even stronger gains among its largest customers. That 117% net retention rate among enterprise clients tells the real story—monday.com isn’t just adding users, it’s systematically upselling them to new features and products within its platform.

Here’s What Crosslink Capital Is Actually Betting On:

Monday.com operates a cloud-based Work OS that lets organizations customize workflows, manage projects, handle CRM, marketing operations, and software development—all on one integrated platform. With over 2,500 employees globally and a diverse customer base spanning enterprises, educational institutions, and government agencies, the company has scale.

The enterprise adoption trend is accelerating. Monday.com earned recognition on Gartner’s Magic Quadrant for Adaptive Project Management and Reporting (four consecutive years) and Collaborative Work Management (three years running). That’s not an accident—it reflects genuine product-market fit in an increasingly crowded space.

The AI Tailwind

Here’s the forward-looking angle: while AI disrupts many software categories, monday.com is actually leaning into it. The company is integrating AI-infused applications across its platform, positioning itself to benefit from—not be displaced by—the AI wave. That’s a meaningful competitive advantage.

Current Portfolio Context

Crosslink Capital’s other top positions paint a picture of a fund with conviction in growth businesses:

Chime Financial (NASDAQ: CHYM): $589.92 million (42.9% of assets)
Lam Research (NASDAQ: LRCX): $102.20 million (7.4%)
MercadoLibre (NASDAQ: MELI): $63.10 million (4.6%)
Pure Storage (NYSE: PSTG): $60.37 million (4.4%)
Veeva Systems (NYSE: VEEV): $53.94 million (3.9%)

The monday.com holding at 2.87% sits outside their top five, but the fact that they’re adding to it—while the fund is overall downsizing by 22%—signals real conviction. They’re trimming positions elsewhere but buying more here.

The Investment Case

Monday.com trades at $156.98 per share (as of early December 2025), down sharply from recent highs but fundamentally sound. The company posted $1.2 billion in trailing twelve-month revenue with $65 million in net income, reflecting improving profitability even as it pursues growth.

What Crosslink Capital is betting on: a SaaS platform with sticky enterprise customers, accelerating upsell momentum, AI integration working in its favor, and valuation that’s no longer pricing in perfection. The stock-based compensation issue exists but isn’t disqualifying.

The Bottom Line

When institutional capital moves decisively into a beaten-down stock, especially when that fund is simultaneously reducing overall portfolio size, it deserves attention. Crosslink’s expanded monday.com stake suggests they’re seeing both near-term value and medium-term growth potential that the market hasn’t yet repriced. For investors interested in cloud workflow software with real enterprise traction and net retention north of 100%, monday.com warrants serious consideration.

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