Can someone explain why this is a reasonable ballpark price?
The site is successful, and provides real value to the apps being hunted and the users that discover the apps - but the acquisition price is in acquihire territory.
The site is successful, and provides real value to the apps being hunted and the users that discover the apps - but the acquisition price is in acquihire territory.
In what way? It has taken investment so it needs to eventually make money. How is going to monetise? Also, there is a limited audience for it so it's growth potential isn't great. Even as someone involved in tech and interested in startups I don't get much use out of it as most of the products aren't interesting or useful.
$20MM is enough to get investors ($7MM invested) off your back and let the acquisition go forward and there is plenty of opportunity for back-end deals where key players have an earn out not represented by the acquisition price.
I'll go out on a limb and suggest it's 40-60X revenue, and even that may be too low (anyone from ProductHunt reading, please correct me, but I doubt it).
0. https://techcrunch.com/2016/05/19/product-hunt-is-ready-to-r...
The sale price to me is baffling, even if it was stock. You're not buying revenue, you're not buying valuable technology IP, and you're sure as hell not buying a world-class team that innovated and built some rocketship product.
So how do you explain it? Maybe the fact that it was bought by one of their investors is a start..
There's also some obvious alignment between the two companies so maybe it was a much larger multiple than I would have expected. The team absolutely managed to build a product that has captured the attention (in many cases daily attention) of the type of people that AngelList wants.