Everyone is talking about sales after WeWork, but you may not yet need the right numbers to achieve a strong IPO? After One Medical's successful debut this week, Alex Wilhelm might have thought it looks like a tech-savvy unicorn that doesn't generate the recurring earnings and margins of a real tech-driven company.
However, the doctor service provider closed almost 40% with a somewhat ambitious price of $ 14 per share. During his time as a private company, the company had raised $ 532.1 million, a relatively current value of $ 1.71 billion. One Medical today has a closing value of $ 19.50 per share and a value of $ 2.38 billion.
This despite gross margins below the 50% mark, recurring sales in a large minority and sales growth of 30% in 2019 at the bestas Alex found on Extra Crunch Friday. It is now worth about 8.5 times its lagging earnings.
"There are cash-generating SaaS companies that grow a little slower and trade with lower multipliers," he observed earlier. “I cannot see why the company – an unprofitable, only moderately growing rising star with one-time earnings – is worth a multiple of SaaS. Especially since the gross margins are not high and do not improve. "
Mattress seller Casper, who also provided new information about his IPO plans this week, has numbers that aren't all that different. But it is only to be hoped that in the last private valuation, not too large a haircut is made, as Alex noted separately on EC.
Maybe despite the rough debuts of Blue Apron, SmileDirect, WeWork and a number of others, public investors are still interested in a great story? Regardless of these questions, One Medical's work to improve medical care is commendable (in 2013 the company was even awarded the Best Healthcare Startup Crunchie).
Stay tuned for more.
Let's say the public markets are not for you and you want to be acquired instead. Ed Byrne of Scaleworks views this both as a start-up investor and, through a separate part of his company, as an acquirer, and has kindly provided the start-up founders with a detailed explanation of Extra Crunch.
Here are his most important decision-makers from a buyer's perspective:
- Disadvantage protection: Are we confident that we won't lose any money?
- Median: If we work hard, focus on doing good business, and do the low-hanging fruits, can we expand this business to the point where a solid return is achieved (solid return is a higher valuation multiple from a higher earnings base)?
- top: If one of our ideas for creating categories prevails and we succeed in winning a very targeted market segment, does this company have a chance to become a real winner and achieve oversized returns?
Buying and accepting someone else's business is always a scary thing – the unknown unknowns – but once you get to grips with the basics of the business, acquisitions can be a real accelerator compared to the epic effort – and high risk – of starting over ,
Do you want to build the next Airbnb? In this week's investor survey, Arman Tabatabai spoke to some of the most active and successful investors in travel-related industries. The general mood is quite positive, and mergers and acquisitions are expected to help incumbents improve service quality to consumers and new technologies are breaking down on opportunities for companies of all sizes.
Founding a company in Europe? Would like to? This is how the co-founder of Blossom Capital and long-time investor Ophelia Brown Steve O’Hear explains the opportunities in the region.
I think the turning point is the number of successful growth companies that we have produced from Europe, be it Adyen, Spotify, Farfetch, Elastic and Klarna [Blossom] It was partner Louise too. I think that really showed people that you can take risks early and build meaningful European companies. And I think that really encouraged a new generation of entrepreneurs. And Europe is changing its attitude that it is okay to fail.
And I think the other change is that people are now saying, "Okay, well, I'm not going to go down in the valley and try to build my teams because the talent there is so competitive and so expensive that I want to include it in Europe , “And then finally the great talent for technology, design and products, and then the help of funds like us to scale it in the beginning and in the early stages and then bring up some really interesting things. I don't think US funds come here because they see cheaper prices and lower valuations. They come here because they look at markets and industries and find the next best potential in Europe.
Around the horn
SoftBank wants its on-demand portfolio to lose less money (TC)
Track corporate venture capital growth over the past decade
True Product-Market-Fit is a company that is at least viable.
Success monitoring of emails, app launches by invitation only and other growth tactics (EC)
All eyes are on the next liquidity event when it comes to space startups (TC)
Basic advice on securing your small startup (EC)
Add India to Your Business (TC)
Later this week, Alex talks to co-host Danny Crichton about:
- Little Perkins' quick investment in the last $ 600 million round
- The Free Agency technical game for talent management
- The big round for "Ring for Enterprise" Verdaka
- Trends in financing insurance startups
- On-demand war updates
- The latest technical IPOs
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