Everyone says software is dead. SaaS startup Linear just doubled its valuation to $2.5 billion.

Linear co-founders (left to right): Jori Lallo (CPO), Karri Saarinen (CEO), and Tuoman Artman (CTO).

Photo courtesy of Linear.

Linear is a startup that makes product management software.

It completed an employee tender offer at a $2.5 billion valuation, double last year's valuation.

The CEO says the company is cash-flow positive, so the deal is mostly an employee retention tool.

Artificial intelligence was supposed to kill software-as-a-service.

Linear didn't get the memo.

The startup behind a popular product management tool has doubled its valuation to $2.5 billion and surpassed $100 million in annual recurring revenue, defying the ongoing narrative that AI will make traditional software companies obsolete.

"I think the narrative is always overly generalized that every SaaS company is dying or it's not relevant anymore," Linear cofounder and CEO Karri Saarinen told Business Insider.

"I think it probably depends a lot on what type of SaaS company you are." Linear completed an employee tender offer at a $2.5 billion valuation, with Accel leading the deal, with participation from existing investor 01A and new investors Salesforce Ventures and S32.

The transaction is a secondary sale, meaning $99 million went to employees rather than Linear's balance sheet.

It also doubles the $1.25 billion valuation Linear reached in a Series C funding round led by Accel last year.

Linear's growth is emerging as a counterpoint to one of Silicon Valley's biggest debates: whether AI agents will replace SaaS companies or simply change what they do.

For Linear, the argument is that AI creates more work to organize rather than eliminating the need for its product.