Traditional marketplace multiples vary widely. Prior to Q3 2018, the sector only had 2 companies and now has 8. The median multiple is now 3.7x, but Etsy is at 12.7x while Fiverr is at 35x. Etsy grows at 60% YOY with $1.1bln of revenue, and a solid 20% EBITDA margin. Ebay is trading at a historically strong 3.6x revenue multiple and even though growth is 3%, they generate significant cash with a 30% EBITDA margin.
Grubhub. Grubhub popped to 4.4x revenue in Q4 2019, but that’s because they announced they’re for sale. We’ll see what happens there. Meal delivery has become increasingly competitive as peers like Uber and DoorDash continue to overspend on customer acquisition as if the market can only support one winner. Uber did just buy Postmates July 6th for $2.65bln in stock.
Subscription. Subscription has been humbled since 2018, and now trades at 6.2x revenue. Netflix revenue multiple continues to be the outperformer at 9.7x even though accounting magic has resulted in -$663mm of cash burn but $3.8bln of EBITDA. Care.com no longer trades as it got acquired by IAC in December 2019 for $500mm (2.5x revenue). Match fell to 6.6x revenue from 10.0x while Angie’s List (now part of HomeAdvisor) is at 3.3x.
Ecommerce is varied. The sector is the least attractive to investors, with a median revenue multiple of 1.7x. There is a big difference between what we would call premium ecommerce like Stamps.com, Carvana, and Amazon (5.8x, 8.3x, and 4.8x), versus weak ecommerce like Blue Apron (0.3x revenue). The latter are far less discretionary than the former. Chewy which is a new, massive non-discretionary ecom player ($5.9bln in revenue) trades at 3.9x, likely because it still loses money (-$195mm). We would note it has excellent customer retention metrics though and will likely be a premium ecom player for years to come, if not a nice acquisition target.