Travel marketplaces down to 1.9x. Multiples hit 10.6x in Q2 2021. Booking.com is trading at 5.7x.
Labor intensive space. The only reason we even include these companies in our analysis is because investors like Softbank insist on labelling these services businesses as tech co’s. At best, they’re tech enabled which isn’t the same thing at all. Remember when Groupon was a high flier? Well today it’s shrinking and trades at 0.3x revenue. Cash on the books represents nearly the entire the market cap. This was one of the fastest growing companies ever that came up during the recession of ’08, and now no one cares. Redfin and Opendoor have been decimated over time. Redfin and Compass don’t make money, which is a very dangerous place to be for services businesses of their size.
Subscription. B2C subscription is an excellent business model and trades at 4.2x revenue. Match may be the best business model, with 29% margins and 7% YOYG.
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 Carvana, Allbirds, Coursera, Chewy, Warby, LegalZoom, and Amazon, versus weak ecommerce like Blue Apron. Note that the margins in ecommerce are terrible with a median EBITDA margin of -5% and YOY growth of only 7%. While we characterize Amazon as ecom, all the value is driven by AWS.