B2C multiples are down

We follow 59 publicly traded consumer tech companies (B2C) in industries like social media, marketplaces, subscription, and ecommerce.  Given the diversity of industries, the multiples vary.  Below is the data along with a few observations.



Social media has been sliding.  The median revenue multiple is now 65x.  While the revenue multiple is still strong, it’s down from 11.1x in June.   Snapchat has also taken a major dive falling from 22.2x in March 2018 to 6.1x today.


Marketplaces are also falling, down to 2.4x.  The revenue multiple for marketplaces fell to 2.4x.  The eighteen companies in this data set are diverse, but on median generate $849mm in revenue with 14% YOY growth and positive EBITDA ($91mm) and cash flow ($136mm).  Note the multiple is on net revenue, not GMV.


Ad Based.  There are only 3 ad based businesses in our data set, and 1 of them (Pandora) is trying very hard to become a subscription business. This space predictably has plummeted (2.2x revenue) – ad spend is the first to go when companies fear a recession.  Note however Google trades at 5x revenue and has a much healthier profile than Yelp and Pandora.


Subscription.  Subscription has been humbled from earlier in the year, and now trades at 5.9x revenue.  Netflix’s revenue multiple continues to be the outperformer at 9.6x.  Match Group, owners of Match.com, also enjoys a strong multiple at 7.8x. We also recently added Sirius/XM to the data set which trades at 5.9x.  Spotify is trading at a healthy 3.4x.   Overall the space is growing nicely at 33% YOY.


Gaming isnt’ growing.  With all the hype around esports, the big public gaming companies are not growing, with median YOY growth of only 3%.  Their median revenue multiple of 4.7x is strong continues its decline. It’s a bit perplexing to us as the sector’s YOY growth is only 3%, although median revenue is material at $3.5bln and EBITDA is very strong at $847mm.


Ecommerce is below 1.5x. The sector is the least attractive to investors, with a median revenue multiple of 1.4x.  There is a big difference between what we would call premium ecommerce like Alibaba and Amazon (7.7x and 3.7x), versus soft ecommerce like Blue Apron (0.3x revenue).   Median revenue of the space is $1.5bln with 12% YOY growth.


Payments trades at 7.4x.  We only have two companies to look at in payments so we try not to draw generalizations about the space.  We are glad to hear Stripe is considering an IPO so we’ll have another data point shortly.


Hardware is consistent.  ­Hardware is steady at 2.7x.  Roku is the standout of the group (6.7x) followed by Garmin (3.3x).  Apple has been punished as of late (down to 2.8x from a high of 4.2x) The space isn’t growing and EBITDA margins are razor thin: revenue is $1.3bln on median with only $30mm of EBITDA.  Sonos, the newest addition to the space is actually trading at a lower revenue multiple than the group at only 0.8x.


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