Sacra estimates that Retool hit $120M in annual recurring revenue (ARR) in October 2025, up from $90M at the end of 2024. The company has experienced explosive growth, reaching this milestone after launching AppGen in April 2025 and Agents in May 2025, which introduced AI prompting credits and agent hours as new monetization units.

Retool's revenue trajectory shows the company scaling rapidly from early traction. The platform generates revenue through subscription-based pricing tiers, with customers paying for seats across different plan levels that include varying features like SSO, audit logs, and on-premises deployment options.

The company's revenue mix has evolved significantly with the introduction of AI-powered features. The shift from lower-margin inference services to higher-margin SaaS attach products has improved unit economics, with gross margins reportedly climbing from negative territory to over 20% as the business model matured.

Enterprise customers represent a significant portion of revenue, with large organizations like Amazon, Brex, and Coinbase running thousands of Retool applications internally. The platform's ability to handle production-grade internal tools at scale has enabled substantial contract values from these enterprise accounts.

Retool raised a $45M Series C in July 2022 at a $3.2B valuation, led by Sequoia Capital with participation from notable investors including the Collison brothers from Stripe, Nat Friedman, Elad Gil, and BOND Capital.

The company's funding journey began with Y Combinator's Winter 2017 batch, followed by early rounds that established the foundation for rapid growth. Prior to the Series C, Retool had demonstrated strong unit economics and customer traction that justified the premium valuation.

Retool has raised approximately $141M in total funding across multiple rounds. The substantial valuation reflects investor confidence in the company's position within the expanding low-code development market and its ability to capture enterprise spending on internal tool development.

The 2022 funding round came during a period of strong momentum for developer tools companies, with Retool positioned as a leader in the internal application development space.

Retool is a full-stack development platform that lets developers build production-grade internal applications in hours rather than weeks. The platform functions like a sophisticated Lego kit where pre-built UI components, database connectors, and automation workflows can be assembled into custom business applications.

The core product centers around a drag-and-drop interface builder where developers place components like tables, forms, charts, and buttons onto a canvas, then connect them to live data sources through SQL queries, JavaScript, or Python code. The integrated development environment shows real-time data while coding, supports collaborative editing, and includes version control through Git integration.

Retool connects to over 100 data sources including databases like PostgreSQL and MySQL, APIs, and SaaS platforms like Salesforce and Stripe. Developers can write custom queries and transformations while the platform handles authentication, permissions, and deployment infrastructure automatically.

The platform includes Workflows for backend automation, allowing teams to build scheduled jobs, webhook handlers, and event-driven processes using the same visual interface. Mobile app development uses React Native to create iOS and Android applications from the same component library.

Recent AI additions include AppGen, which generates complete applications from natural language descriptions, and Agents, which can reason over data and take actions within business processes. These AI features maintain the same security and governance controls as manually-built applications.

Retool operates as a subscription SaaS platform with per-seat pricing across multiple tiers. The company targets developers and technical teams rather than business users, positioning itself as a developer-first tool that requires coding knowledge to fully utilize.

The go-to-market approach combines bottom-up adoption within engineering teams with enterprise sales for larger deployments. Individual developers and small teams can start with self-serve plans, while enterprise customers require custom implementations with SSO, audit logging, and on-premises deployment options.

Revenue scales through seat expansion as more team members adopt Retool for different internal applications, plus feature upgrades as organizations require enterprise-grade security and compliance capabilities. The platform's stickiness comes from the operational dependency created when critical business processes run on Retool applications.

The business model benefits from high switching costs once applications are deployed in production environments. Organizations typically build multiple applications over time, creating a portfolio effect where Retool becomes embedded in daily operations across different departments.

Enterprise customers drive higher contract values through on-premises deployments, advanced security features, and dedicated support. The platform's ability to handle sensitive production data and integrate with existing enterprise systems justifies premium pricing for large organizations.

Traditional low-code platforms like OutSystems, Mendix, and Microsoft Power Apps compete for enterprise application development budgets. These platforms emphasize visual development but often target business users rather than developers, creating different user experiences and capabilities.

OutSystems and Mendix focus on external-facing applications and complex enterprise workflows, while Retool concentrates specifically on internal tools. Microsoft Power Apps leverages existing Office 365 relationships and bundled pricing, though it lacks the database connectivity and developer-centric features that define Retool's approach.

Budibase, Appsmith, and ToolJet offer open-source versions of internal tool builders, competing primarily on cost and customization flexibility. These platforms appeal to organizations with strong technical teams who prefer self-hosting and code-level control.

The open-source model creates pricing pressure on hosted solutions like Retool, though enterprise features like SSO, audit logging, and professional support often drive organizations toward commercial platforms for production deployments.

React and other modern web frameworks represent Retool's primary competition, as many organizations choose to build internal tools from scratch using standard development practices. AI-powered coding assistants like Cursor and GitHub Copilot have made custom development faster and more accessible.

The choice between Retool and custom development often comes down to engineering resource allocation and time-to-market requirements. Organizations with abundant engineering capacity may prefer full control, while resource-constrained teams value Retool's speed and built-in infrastructure.

The introduction of Agents and AppGen represents Retool's expansion into AI-driven business process automation. These features move beyond application building into workflow automation and decision-making, targeting the broader robotic process automation market.

AI agents can handle tasks like customer support ticket triage, data analysis, and approval workflows, expanding Retool's addressable market from internal tool development to operational automation. The agent-hours pricing model creates new revenue streams tied to business process value rather than just seat counts.

Retool for External Apps enables customer-facing portals and public applications, expanding beyond the internal tools market into general web application development. This capability targets use cases like customer dashboards, partner portals, and public-facing administrative interfaces.

The external apps feature opens competition with traditional web development frameworks and customer portal solutions, representing a significantly larger market opportunity than internal tools alone.

International expansion, particularly in Europe through the London office, provides access to new customer bases with different regulatory requirements and data sovereignty needs. European organizations often require local data hosting and compliance with GDPR and other regional regulations.

The agency partner program creates a channel for reaching smaller organizations that require implementation services, expanding market reach without direct sales investment. This approach mirrors successful partner ecosystems in other developer tool companies.

AI displacement: Advanced AI coding assistants and automated development tools could reduce demand for low-code platforms by making traditional programming faster and more accessible. If AI can generate internal applications directly from requirements without visual builders, Retool's core value proposition diminishes.

Enterprise competition: Microsoft's aggressive bundling of Power Apps with Office 365 and Teams creates pricing pressure and reduces switching costs for existing Microsoft customers. Large enterprises with established Microsoft relationships may default to Power Apps despite technical limitations.

Open-source pressure: The growing maturity of open-source alternatives like Budibase and Appsmith threatens Retool's pricing power, particularly among cost-sensitive organizations with strong technical capabilities. As these platforms add enterprise features, the value gap with commercial solutions narrows.