Traditional marketplace multiples vary widely. Prior to Q3 2018, the sector only had 2 companies and now has 7. The median multiple is now 2.6x, but Etsy is at 6.8x while Fiverr actually rose to 8.1x. Etsy grows the fastest with 36% YOY growth, $818mm of revenue, and a solid 14% EBITDA margin.
Grubhub. Grubhub popped to 4.2x revenue in Q4 2019, but that’s because they recently announced they’re for sale. 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.
Subscription. Subscription has been humbled since 2018, and now trades at 3.8x revenue. Netflix and Match’s revenue multiple continue to be the outperformers at 8.8x and 10.0x respectively, because their customers are so sticky. Care.com no longer trades as it got acquired by IAC in December 2019 for $500mm (2.5x revenue).
Ecommerce is soft. The sector is the least attractive to investors, with a median revenue multiple of 0.7x. There is a big difference between what we would call premium ecommerce like Stamps.com, Carvana, and Amazon (3.8x, 2.5x, and 3.4x), versus weak ecommerce like Blue Apron (0.5x revenue). The latter are far less discretionary than the former. Chewy which is a new, massive non-discretionary ecomm player ($4.8bln in revenue) trades at 2.9x, likely because it still loses money (-$231m). We would note it has excellent customer retention metrics though and will likely be a premium ecomm player for years to come, if not a nice acquisition target.