Q1 2024 Tech Multiples

Below are revenue multiples for publicly traded consumer tech companies (B2C).? Industries and therefore multiples vary widely.?

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Social media trades at 8.5x.? Multiples rose steadily through 2020 peaking at 22.7x on median in Q1 2021.? YOY growth in the space is only 20% on median, with the newest entrant to go public, Reddit, leading the way.?

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Travel marketplaces are at 1.9x.? Multiples hit 10.6x in Q2 2021.? Booking.com is trading at 5.8x.?

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Traditional marketplace multiples vary widely.? Prior to Q3 2018, the sector only had 2 companies and now has 10.?? The median multiple is now 2.2x, but AirBnB is a standout at 9.5x.?

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Labor intensive space.? The only reason we include these companies in our analysis is because investors like Softbank insist on labelling these services businesses as tech co’s.? Clearly they’re not, and the lesson here is not to believe the hype.? Tech-enabled services is not tech, and the space has poor multiples that fit the business models.

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Rideshare multiples vary.? Lyft is now 1.6x revenue while Uber is at 4.5x revenue.? Keep in mind food delivery saved Uber during 2020 and that line of business is material.? Bird seems headed to insolvency.

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Subscription. ?B2C subscription is an excellent business model and trades at 3.7x revenue.? Match and Sirius have excellent margins (~29%). ?

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Gaming.? The median revenue multiple of 5.2x is strong. SciPlay was acquired in October 2023, and no longer trades. ?

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Ecommerce is varied. The sector is the least attractive to investors, with a median revenue multiple of 0.6x.? There is a big difference between what we would call premium ecommerce like Coursera, Warby, LegalZoom, and Amazon, versus the rest.? Note that the margins in ecommerce are terrible with a median EBITDA margin of -1% and YOY growth of 2%.? While we characterize Amazon as ecom, all the value is driven by AWS, and it trades at 3.4x.? Of note BlueApron was acquired for $103mm, which was a 137% premium to the valuation in September 2023 when the acquisition was announced. ??

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Hardware is at 1.2x.? Roku has fallen the most. ???Apple of course is a serious standout at 6.9x.

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