Datadog might be a reasonably good comparison: Q4 2022 revenue was $469.4M, up 44% YoY. This puts their revenue run rate at ~$1.9B, and their NTM revenue at roughly $2.2B.
As of this morning, they're trading at a $22B valuation, or roughly 10x NTM revenues.
If Substack had priced this round at 10x, fine. 23x though...that really doesn't seem right to me.
Datadog might be a reasonably good comparison: Q4 2022 revenue was $469.4M, up 44% YoY. This puts their revenue run rate at ~$1.9B, and their NTM revenue at roughly $2.2B.
As of this morning, they're trading at a $22B valuation, or roughly 10x NTM revenues.
If Substack had priced this round at 10x, fine. 23x though...that really doesn't seem right to me.
Even is Substack’s valuation is 75% lower, does it matter if there are enough investors who are willing to buy into the company? Are people investing now at risk for losing their money if the Substack community support is so high that the company can raise 5 million+ off of them? In other words, if there are enough buyers, does the lower valuation really make any difference? Does it really mean that people will lose their money in the case of an IPO or merger/acquisition?
Datadog might be a reasonably good comparison: Q4 2022 revenue was $469.4M, up 44% YoY. This puts their revenue run rate at ~$1.9B, and their NTM revenue at roughly $2.2B.
As of this morning, they're trading at a $22B valuation, or roughly 10x NTM revenues.
If Substack had priced this round at 10x, fine. 23x though...that really doesn't seem right to me.
Even is Substack’s valuation is 75% lower, does it matter if there are enough investors who are willing to buy into the company? Are people investing now at risk for losing their money if the Substack community support is so high that the company can raise 5 million+ off of them? In other words, if there are enough buyers, does the lower valuation really make any difference? Does it really mean that people will lose their money in the case of an IPO or merger/acquisition?
Thread continued here:
https://on.substack.com/p/wefunder/comment/14056270