We follow 56 publicly traded internet companies in various sectors including social media, marketplaces, content distribution, gaming, ecommerce, payments, and new hardware. The multiples are pretty varied. Below is the data along with a few observations.
-Social media can do no wrong. The median revenue multiple is now 10.15x with Snapchat and Facebook leading the way at 22x revenue and 14x revenue respectively.
-The revenue multiple for marketplaces held steady at 3.21x versus last quarter. The eighteen companies in this data set are diverse, but on median generate $1.1bln in revenue with 13% YOY growth and positive EBITDA ($77mm) and cash flow ($100mm).
-Content distributors are showing real weakness. The revenue multiple of the comp set which includes Google and Netflix is now at 3.76x, down from 5.95x two quarters ago. That said, Netflix’s revenue multiple jumped materially this quarter to 9.09x from 7.97x and Google’s revenue multiple is also up. It’s the rest of the group which includes underperformers like Pandora that is bringing the multiple of the sector down.
-Gaming is strong with revenue multiples of 6.29x, a high not seen in 8 quarters.
-Ecommerce is steady, with a median revenue multiple of 1.74x. That said, there is a big difference between what we would call premium ecommerce like Alibaba and Amazon (15.5x and 4.02x), versus soft ecommerce like Blue Apron (0.63x revenue). The Wall Street Journal put out a scathing article on the meal box delivery sector, with a VC from Greycroft quoted as saying he knows no one that is actively looking at the space anymore – and Greycroft made money on Plated.
-Hardware has also improved, now trading north of 3x at 3.20x. Roku lifted the multiples of this group with a white hot 8.89x, and without Roku the sector would actually have been down.