GMV of 132m. GMV is the latest number startups like to bandy around. The origin is for e-commerce sites and marketplaces but now everyone seems to think it applies to them! Why? Because it’s easiest to boost with coupons and marketing and getting a multiple of it for valuation usually means high valuation. I much prefer gross margin or even ebitda. Imagine if propertyguru or sgcarmart start to report the full real estate or car value as their top line metric...
Even gross margin can deceive the real picture if mgmt choose to classify discounts as marketing which falls under overhead and not cogs.
Honestbee is a case in point. Only selling 132m usd last 12 mths and probably barely at 5-10% real gross margin if we include marketing/discounting expenses. That’s essentially a deep loss making 10m usd business spread out across many countries. In the normal world, that’s called no big deal and probably no white knight will save it. But in our frothy tech world?
Who else fits this description? There are non marketplace/e-commerce poster boys that track gmv as if it’s revenue. Let’s see what happens...
Thoughts on startup scene in South East Asia. While effort is made to be accurate in terms of numbers, i may sometimes get the data wrong. My purpose is to share what i know and what i have learned over the past 23 years. Feel free to leave comments or to email me. And if you are keen to learn more about Angel Investing pls visit https://www.angelcentral.co/investors/membership
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