Zapier reached a $5B valuation with $1.3M of funding
forbes.com
forbes.com
That being said, I come from a software background (As many here at HN do), and I recently found "Integromat" and have completely switched over all my Zapier automations to them. Their price point is much cheaper (Zapier was beginning to charge a few hundred a month for me - and now I'm down to $29/mo with Integromat which could be $9/mo if I wasn't impatient and wanted 1 minute intervals) - but the kicker for me was their UI and just the "programming" mindset that came along with it - I can do many more complex operations.
Just a happy customer - and hoping they have more success to continue improving their product.
Zapier is definitely a better fit for non-tech people, and more simple tasks though.
[1]: https://techcrunch.com/2020/10/14/celonis-acquires-czech-sta...
Thanks! marius@wensia.com
I love Zapier but I can't justify spending so much on these small automations I use it for. I'm piggybacking on my company account currently but Integromat looks really nice! Exactly what I've been looking for
We've automated a lot of tedious, manual tasks that you would typically assign a VA.
I think we save some money, but even if it was break even, or more expensive than manual labor, the mental overhead of not managing another person, wondering whether the tedious work was done, and according to specification justifies the cost.
In my mind Zapier does things that a junior developer or maybe an office admnistrator would do, not an assistant. I feel like there is a small, but significant difference.
Previously we had a virtual assistant:
1. Create a Google Doc
2. Title it according to a specific standard
3. Copy/paste information into it
4. Make the link publicly shareable
5. Update our CMS with the link to Google Docs
6. *1,000
This work sucks, and it's much easier to depend on a machine than hiring, training, documenting, managing, QAing someone to work in a bad job.
As cross-site cookies and browser pixels are increasingly blocked, ad platforms are moving from browser-based tracking to server-side data transfer.
Like those other companies, Zapier provides a single integration point that funnels user and conversion data to dozens of marketing companies' server-side APIs. A few clicks allow you to transfer your customer data to/from hundreds of different platforms.
> Zapier provides a single integration point that funnels user and conversion data to dozens of marketing companies' server-side APIs
I think that conclusion is a little far-fetched. If you've used Zapier you know how expensive it is to run tasks, so in my experience Zapier is used more to automate little bits of your business that you don't necessarily want to bother your engineer with. It's not like Segment that you can just turn on a firehose of data.
[1]:https://zapier.com/apps/facebook-conversions/integrations
IFTTT was a disaster as a product for laypersons. Zapier is how you have to make things work for normal people to use such automation tools. There will be many more Zapiers across every segment where there is complexity in the tooling and interaction.
If a person wanted to start a great business, find a business segment you know really well and create a niche Zapier for it. Then when the big companies come knocking (which they will right before they try to kill you and take your niche), sell to them. It's a repeat of the great CRM / enterprise roundup wars.
LOL.
first of all if you only have 100k pageviews a month you're probably not even making $599 from serving ads
and second i don't understand what Zapier is supposed to accomplish in your mind?
maybe you have been using it in a way I can't think of?
from what I think you are talking about: is zapier supposed to like sit between website & like some SSP or DSP? during the bid!?!?! or just to like establish an audience to target like send your new email based id to a DMP or wherever for a customer who wants a PMP deal or something?
Also I'm almost positive Segment in your example is not used in the way you describe to pass user/device identifiers between ad platforms? Like i think they connect to adwords but only to grab the standard reporting data you can get into bq anyways. not any user or device data (impression level stuff is now complicated in their own odd like 'private' data clearing house thing).
TTD Unified ID would be what you're looking for
You're talking about something entirely different from what the parent is.
I'm referring to the buy-side of advertising (i.e. an ecomm business running a marketing campaign). Each task could be "Tell Google that person 123 visited landing page X." or "Tell Facebook that person 456 purchased a tshirt." This lets you create targeting segments on the platforms and measure the results of your campaigns.
you can already tell google/fb/dsp/ssp directly no need for zapier - they already have pixels. now fb (and more are building) have server to server. puttin zapier in the middle especially for individual pageviews/impressions would be inconceivably ginormous scale
for sure it's super complicated with the changes google is forcing and a ton is up in the air.
but assuming google's vision of the future comes true this type of data exchange will likely be blocked in whole or minimally as we know it now
from what i understand, in that future the browser holds the 'interest groups' e.g. targetable user data we're talking about for remarketing, interest cohorts etc - i think that's floc + turtledove in action
in thinking from sell side example publisher.com would create a (i think k-anonymous?) interest group in browser.
it looks like google might go so far as to kill something like TTD universal id by enforcing a privacy budget. so there goes that idea of a middle man syncing publisher.com login pii identifier -> ssp/dsp
google's write up says bidding happens in the browser via 'worklet' but i think that can be delegated to a DSP if done to their likeing as a 'trusted 3rd party server' which also gets rid of all these identifiers including IPs/UAs (google will obviously control the market lol). so i guess that could be some product but zapier moving into but totally completely different than now
The businesses that use these platforms are the data *controllers* and are responsible for implementing consent, "do not sell my information", "show me my data", or "delete my data" flows as required by law. The platforms generally offer APIs to implement these required data flows in a centralized way, which is another major value prop for them.
The platforms serve as the data *processor* and can assume the data is compliantly obtained by the controller until informed otherwise.
Under the predominant data transfer model, the third-parties cede responsibility by making the data transfer an active behavior by businesses. Ad tech companies can say "We didn't actively collect the data from customers - we passively received it from businesses." That makes a huge difference in term of regulatory compliance.
That said, this has been the most common data transfer model for years. "Data hoovering" is a misconception that allows millions of businesses who actively send customer data to Google/FB to shift privacy criticism onto the platforms.
And yet they may have no direct interaction with the user/data subject, who may not even be aware that they exist, so this model is still flawed.
"Data hoovering" is a misconception that allows millions of businesses who actively send customer data to Google/FB to shift privacy criticism onto the platforms.
I would have much more sympathy for this point of view if the likes of Google and Facebook were transparent with businesses integrating with them about what that really means in practice. For example, if we did a survey of local stores with simple websites that include any Facebook asset on their site, how many of them do you think could accurately describe the implications in terms of tracking their users? What about sites that use Google Fonts? I'm not even talking about asking businesses to actively upload their user contact details for targeting or deliberate tracking like Google Analytics or Facebook pixels here, just the incorporation of any third party resource into a website.
It's also important to say that this isn't just about Google and Facebook. Many third party resources you might incorporate into a site for some reasonable purpose could also be used for tracking, while the site operators may or may not be fully aware of what is being done and the visitors may not be aware of the resources at all. Think of a CDN used to improve performance or a payment service that recommends including its scripts across all pages on a site to feed into risk analysis, for example.
The general problem is the same in all of these cases. The way the technology actually works doesn't match with the way authorities are attempting to regulate it. Unless you're willing to interpret the current regulations strongly enough that some behaviours with legitimate uses are also effectively prohibited across the entire Web (at least within your jurisdiction) I'm not sure you can ever square this circle as a regulator operating within the current frameworks.
Say you were going to take the "Contact Us" form submissions from your website push those to Zapier to check if they were legitimate (before sending email to the addresses), you would need to disclose what 3rd parties you're using, what data is shared with them, etc.
Checkout this massive list of companies that PayPal "shares" your data with - https://www.paypal.com/uk/webapps/mpp/ua/third-parties-list
(mostly for fraud + geo checking)
Is there a specific reason a company would have IPO in mind but wouldn't say they are looking to do an IPO eventually? Is there a particular reason to say that?
I think most companies would prefer to operate this way, too.
But as it stands, I make a lot of money off those "uncertain" lottery tickets and demand a lot of them wherever I go.
Stock is literal ownership and it eases “ownership problems” proportionate to the meaningfulness of the expected value of the stock to the employeee-owner. It’s a powerful tool for increasing teamwork.
First and only place I've ever participated in profit sharing.
Profit sharing happened twice a year, but I don't remember it ever going above 10% of your six-monthly compensation rate (so effectively, you got 20% at most).
Well yes, if you remove the "unicorn" qualifier you can find lots of companies that don't give employees equity. In many European countries the tax treatment of stock-based compensation is quite unfavorable. Which is one of the reasons Europe doesn't have as many unicorns in the first place.
2) European VC sector is almost 20 years behind to the one in the US.
3) American VCs are more like to throw more money at you in general. Many European startups don't even consider seeking capital in Europe, because why get 500K if you can get 2M across the pond for the same thing?
4) Europe doesn't have such a shortage of tech talent as the US, primarily because of the differences in educational systems/funding model, etc. So companies don't need to pay 300K/year to get someone who can do magic.
I don't fully understand options, admittedly. I joined because I love their product, and I needed a better paying job than the one I had originally. Plus, the culture was pretty amazing at the time I joined! I left because they didn't pay me enough in the end plus cultural issues :P so I've got a new job paying more with a culture I prefer.
The point was that they did YC and seed round but didn’t raise funding after that. Traditionally startups raise every 18mo and have raised A,B,C,D etc in ~10 years and before hitting $5B valuation.
Even with the latest round, it was a secondary sale, so not dilutive raise. Some investors sold shares to other investors but no new shares where created.
Avoiding that “vc hamster wheel” is that you avoid the conversations, meetings, fundraise roadshows and dilution every 18mo or so. So I think Zapier is an interesting example of a startup choosing a different path. Not purely bootstrapped or traditional vc backed company.
EDIT: Wow, after reading about the lack of Stock Options... I just changed my mind about this comment haha.
Y’all can probably automate interactions with hundreds of web based services in your sleep, using multiple languages, with unit tests, and a Turing complete ML-based proxy server for high availability.
For the rest of us, Zapier is a little like magic. Granted there are other servothay do the same thing, but none that I’ve found do it as easily and as well as Zapier.
Reminds me of why WhatsApp took off. They spent the time to make it work well on early smart phones when that wasn’t easy.
Like the grandparent comment, it's hard for me to imagine that there are enough people in need of this service to justify a $5B valuation
Regarding Terraform, installing it, learning HCL, understanding the state management, maintaining a place to run it, and learning how not to screw it up were all headaches I did not want.
I think you're overestimating what people use Zapier for.
Because developers are relatively expensive.
Because hiring anyone requires identifying someone who can do the job and trusting them to do it well. And even before that, you have to figure out what the job actually is.
Because hiring anyone requires some sort of contract, and that has legal implications that might require approvals etc.
As a developer with the required knowledge and skills, these services offer little value to me, but I'm not their target customer. That knowledge and those skills are the result of decades of study and practice, which is experience that most people don't have, and for all of those people the cost/benefit comparisons are going to look completely different.
...
> You could probably pay someone hundreds of dollars to write software that interacts with web services etc.
The reason is exactly that. They don't want to pay hundreds for a dev to dev for them, and that's just for 'one' integration, with Zapier they can always add whatever they want. They'd rather have the 'cheaper' option (which to be real doesn't always end up being cheaper in the long run, but sometimes does).
The
Your return on investment at the $20.00 per month level is a year or less. So it depends on how long you need it for.
Maybe I spend several hours finding someone online who will do the job for $200, then I spend an hour communicating and clarifying my request, then another hour testing the result. 1 months later I decide I need the automated email to have a different subject line, or include an attachment that wasn’t there before, so I find the developers’ email address and pay him another $100 to make the change - or maybe I don’t because it’s too much trouble.
In the alternate world (in which I live), I simply fire up my browser and create a task in about 15-20 minutes. When I need or want a change, I change it myself.
Less time, less hassle, less risk, and in all likelihood less cost.
This is because you lack the most overlooked and most difficult to teach skill in investing: empathy. Zapier lets non-programmers, the vast majority of the planet, do things that programmers do. Many programmers have poor empathy and thus make bad salespeople and investors. If you can understand how most of the planet thinks and feels though, you can figure out what is going to work and what isn't.
Twitch.tv is something that amazed me that it became so big. I don't really play video games. Who would spend hours watching people play video games? I couldn't understand this phenomenon because I was limiting my exposure to people only inside my own little bubble of reality. I think one can't be a good investor without constantly developing ones empathy because the appeal of various things is difficult to grasp intuitively without a person who would be the customer in mind.
Personally, I think it's important to spend time with people one has nothing in common with to develop this broader empathy and thus be able to pick up on these trends.
That seems fairly insane.
Also, please don't tell other people that they lack empathy straight in the face, that's plain rude, and hey,...sounds like lack of empathy :p
Sometimes I think the application of that word is way too broad, especially in business setting.
This may be where some of the mystery over the product among programmers could lie. It doesn't look like it would actually let non-programmers do what programmers do at all.
Heh. I grew playing games with friends. When I got tired, I'd spend hours just watching them play and having fun hanging out that way. It was no surprise to me they got so big so fast. It really is all about empathy, and I thought this little anecdote would help strengthen your point! :)
Monetizing loneliness is how social media companies grow. twitch just has a strangle hold on a specific community that no one else thought of.
Everyone is lacking empathy, that is not limited to the profession. Empathy on most parts comes from your own experience and understanding, and everyones horizon of experience is limited.
> Twitch.tv is something that amazed me that it became so big. I don't really play video games. Who would spend hours watching people play video games?
Which is strange, considering how many people watch sports. And most videogames are nothing else, just more focussed on mental skills than physical skills. But the main selling point of twitch is IMHO not people playing games, but the interaction twitch offers alongside this. Twitch in that regard is more like a sportsbar or a local sportsfield, where everyone meets, talks, interacts while some do stuff on the side.
The more buzzling part for me are youtube-videos of people playing stuff, because those are missing the interacting and it's just like watching a very poor movie with low production-value.
> I think one can't be a good investor without constantly developing ones empathy because the appeal of various things is difficult to grasp intuitively without a person who would be the customer in mind.
Yes, it's a given that you need to understand the thinking and problems of customers if you wanna sell them something well. Just throwing stuff at them might work, but more efficient is to understand what they want and what they need, and then build and sell it specifically to the targeted customers.
Similar like in a game you need to understand the abilities and weaknesses of your enemy to slay them. That's why marketing and reasearch exist.
Ask yourself who would spend hours watching people play sports, and it might not seem so foreign.
But, if you think about how professional sports is and could foresee the rise of e-sports...
One of the comments articulated that the focus was on the music, not the DJ’s performance, and often times the DJ was not clearly visible, nor intended to be.
Another commenter pointed out that as an electronic music producer nowadays, the only way to present your music, as you also pointed out, is to DJ in front of a crowd.
Don’t underestimate a good DJ, though.
But, it was also pointed out that not all good producers are good DJs and vice-versa.
It is also worth mentioning that Twitch has become an increasingly popular venue for DJs to livestream during quarantine. Ephemeral live performances to reduce copyright infringement penalties are the norm.
Interesting times.
I doubt that's the reason for the evaluation, that's hardly unique.
They all (and I assume Zapier is no exception) only allow "no code" integration in only the most basic scenarios.
I don't think it has much to do with empathy, much rather unbounded money printing of late.
Our startup, Dentir, makes you do things dentists do :p
Dentistry _is_ all the complexity and the skill of , like, drilling into your mouth or whatever.
For what it’s worth, I think it’s easier to teach someone to be precise with a drill than it is to teach computer literacy.
I’m semi retired in my late 30s, so it’s gone well. I am so extraordinarily thankful for the experiences and opportunities I’ve had, but recognize when it’s time to close a life chapter.
The average price to sales for S&P used to be between 1.5-2.5 for many decades. However for these newly IPO companies the price to sales ratios are around 10-15.
Similarly the P/E ratio for S&P companies used to be in the 15-25 range to the considered normal .
However with these internet companies, they usually do not turn a profit or if they do, their PE ratios usually lingers in from ~100 to 1000. And the market considers that normal behavior now.
With that said, consider huge successes like Amazon. Huge successes like Amazon have been generating much more profit compared to what they were projected to earn in 2010 [1]. I picked 2010 since 2 things are out of the way: the tech boom and the credit crunch. Moreover, people understood that Amazon was here to stay. Despite that, 10 years later, they make 20 times as much profit. If investors knew that 10 years ago, I'd bet that the price would not have been about 130$ since according to Google Finance, the diluted earnings per share (EPS) is about 42$, which is about 30% of the 2010 stock price.
Mind you, in 2010, investors already put crazy multiples on stocks like Amazon. Yet, their prediction on how much money it would make has been underestimated back then. If the estimates of 2010 were correct, you'd expect Amazon to now have an EPS of like 6.5$ (130/20) since by conservative measures, the P/E ratio is in the 15-25 range.
Correct me if I'm wrong on this, I'm not the sharpest cookie in the jar.
[1] https://www.macrotrends.net/stocks/charts/AMZN/amazon/net-in...
[2] https://www.google.com/finance/quote/AMZN:NASDAQ?window=MAX
to sell for capital gains when it is higher in the future. Dividends aren't the only way to generate a profit. And for a lot of high income earners, dividends are very tax inefficient as well.
It's called a bubble.
And in any case, if someone else feels that the stock is worth more, and thus pay more for it, what's the problem?
That's not normal, it's pure stupid. So if you don't think there are people sitting on the sidelines watching idiots bid up shares way, way beyond the replacement value of companies, you're not watching the same thing happen that others are.
Do people even understand what these numbers mean? It means after expenses, assuming no future growth, that's how many years it would take to make back your investment.
Do you know why a P/E ratio of 15 was historically considered high? Because even with modest growth, no one wants to wait 15 years for corporate revenues and acquisition costs to break even. News flash, 15 to 25 years isn't normal.
The average company doesn't even make it 15 to 25 years these days.
Assuming any sort of pricing rationality risks the well-known problem that the markets can remain irrational longer than you can remain solvent. It should never have been possible in a rational market for the recent WSB pump-and-dumps to work, yet many billions changed hands as a result. Not that I have much sympathy for the losers on that one, because it should also never have been possible in a rational market for the short-selling strategy that left them vulnerable to work either. Both groups got away with something dodgy for a while and then some of them lost a lot of money when the house of cards fell.
Whether this disconnection of prices from real value is a healthy way for stock markets to operate as a key element in our financial systems is a separate question, and it's one that a different and probably much smaller group of people care about.
As a footnote, it's probably worth mentioning that some businesses, including tech stocks, don't necessarily follow the traditional models for either growth or dividend payments. So although those P/E ratios might be considered very high by traditional standards, those traditional rules of thumb aren't necessarily useful in these cases, even if we only look realistically at the potential for future profits. A high-growth tech startup might have low earnings in the early days and rely on some big investments for funding instead if it's building a huge user base without yet having a firm strategy for monetization, for example. That doesn't mean it won't have genuine potential to earn a huge amount of money from that huge user base later on if it does find the right monetization strategy.
I think it is fair to say 15-25 is pretty normal. The average P/E on the NYSE has been above 15 for the last 30 years, and most of it's 90 year history.
https://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-ea...
An easy reality check is other asset classes like bonds or real estate. If you are doubling your money after inflation in less than 15 years you are either gambling or outsmarting the the market.
You’re off by anywhere from 2-20x on the price to sales multipliers. At one point Snowflake had a market cap of nearly 200x the projected sales of the next twelve months. Before rates started creeping up, most SaaS was trading between 20-40x NTM and up to 60-80x on upside spikes.
What "internet" company has a P/E ratio above 100?
Facebook: 25
Apple: 31
Netflix: 81
Google: 36
You: sure
Me: My company is now worth $10B!
Hackernews: wow that's so amazing! One day in going to be rich doing startups too!
$5,000,000,000 is a truly unimaginable amount in both senses of the word unimaginable. I couldn’t tell the difference between a $5B and $7B company, for example.
And it’s especially hard to tell for a service which is, somewhat by nature, invisible.
But my smart, non-programmer friends love Zapier and I imagine many of their customer relationships will be multi-decade. There really are so many odd businesses in the world.
Not sure how accurate that is but at $5b, I imagine zapier as a cruise ship tied up alongside a glittering glass casino.
Investors assigning value have access to other metrics not visible to us - customer numbers, growth numbers, revenue and what the revenue growth looks like, internal product roadmaps and other areas of growth, etc.
IIRC, Microsoft acquired CompareNet for $400m in 1999. Scripts for scrapping prices. Written in Perl.
I always get stuck on the little questions. Like: Does it work? Is idea worth doing? How big is the market?
(I mention CompareNet because I had some contact with one of the founders. It's my IRL example that I never figured out how to play this game.)
https://www.bloomberg.com/news/articles/2021-02-12/warren-bu...
That's seems like a pragmatic and healthy attitude towards venture capital. I feel like venture capital is gasoline. You can pour in on a fire to make it grow quickly, just make sure you first have a good fire going and careful not to get burned in the process.
Of course that wouldn't work for every product model... some really need that huge capital-driven massive growth to get to some economy of scale. But if you can avoid that, you probably keep a heck of a lot more equity for both founder & early (and maybe not so early?) employees.
It’s also a good signal for the ecosystem to have alternate venture paths and vehicles where founders can keep higher ownership.
Kudos to them
Good ideas are important but good execution is more important.
The former seems ok-ish, the latter not so cool and unfair to the original inventors of the idea.
5 billion dollars for what should've been a free set of libraries and competing UI interfaces to cater to different levels of tech savviness.
It's crazy how complicated the simplest things are in tech that these companies even need to exist. Hopefully it's just growing pains, rather than consolidation and a swamp for decades to come, like we've had with Microsoft.
You really need to run these kinds of services on a server. And the people who use Zapier typically aren't comfortable setting up a server.
Also, there are some very well-done and rather old open source alternatives to Zapier (Huginn, Node Red, etc) but they run best on servers for the reasons mentioned above, so few non-technical people use them.
https://www.cio.com/article/3236451/what-is-rpa-robotic-proc...
I don't understand how there isn't more competition. It's not that difficult to wire up different APIs. This is great for open source software because it's highly modular, independent development with very low levels of complexity.
I don't understand how Zapier has such high prices either. At some of the higher tiers, you could hire someone full time just to what Zapier does since they charge per task. Especially because it's not like people organizations are setting up different automations with completely different enough times to really justify the continuous cost.
I really thought it would be a very niche product for a very specific type of organization.
If it is not a feature of the product, it is diverting a developer’s time, which makes Zapier’s price a bargain.
It is for organizations that have non-developers needing integrations and cannot rely on their internal devteam to get the integration done in a reasonable time and/or cost.
https://n8n.io/ is the open source version https://tray.io/ is more of an enterprise version, and better for people that are more technical https://www.integromat.com/ is considered the cheaper alternative
For example, with IFTTT the RSS trigger is pretty stupid but with zapier you can trigger based on parsed fields with values and triggers on those values...
I had hoped that Zapier would put some pressure on IFTTT to do more but it seems like they're comfortable focusing on IoT/basics/appliances
I know that IFTTT is a quite long on the market, do not know about functionality comparison.
Even cheapest Zapier plan is $19.99 per month.
$5B valuation for common shares is a very different thing than $5B for preferred shares.
That kind of ignorance makes me doubt other things said in the article.
If I invest $1300 to buy 0.026% of your house, does that mean it's worth $5 million now?
Edit: I read it wrong, false alarm. Zapier managed to reach a 5b valuation given that they only needed to raise 1.3m in funding total. Impressive!
$1.3M in $140M RR is like a paper change. So, they can't find that amount somewhere in their revenue stream?
They have many more millions available to them internally.
But the original investors were "Bessemer Venture Partners, Threshold, Salesforce Ventures and Missouri-based Permanent Equity..."
So how is that not having VC at your origins?
That's not an insignificant sum of money, I see that they didn't take further rounds, but still this feels like a nice marketing piece with a bad headline.
Looks like funding came from YC, so yeah, they were funded.
I would trust this number far less than a number one would arrive at a new VC round
How many? There's a difference between buying 1 share at $5000 and 50,000 at $5000.
The most important factor or metric you're missing from the equation is growth (assuming eventual profit margins are normal). It doesn't matter what today's revenue numbers are, if there is an eventual much better revenue number in the future.
This can be sustained by something like:
100% YoY growth over 5 years: 4.5b revenue at a $5b valuation?
50% YoY growth over 10 years: 8b revenue at a $5b valuation?
Looking much more like a lot of value there.
[0] https://en.wikipedia.org/wiki/List_of_largest_companies_in_t...
Amazon and Cisco were similarly overvalued in 2000. It took Amazon 7 years to trade back to that price. Cisco never has.
Companies north of 30x sales are generally overpriced, but that metric alone is still woefully inadequate to determine true NPV of future earnings. Software co's can afford higher P/S for their true value because of the unprecedentedly high margins they're able to achieve and reap as profit once operating expenses are managed. There's a reason BRK bought Snowflake. Amazon was still a great purchase in 2000 because what ultimately matters is the long term value. You can bet that you'll get more value by buying at a cheaper price later on, but that may ultimately never happen. Knowing that AMZN would be where it's at in 2021, buying it in 2000 is the right choice without 20/20 hindsight of market conditions. Same is true of high value companies like Cloudflare and Fastly. There may be interest rate increases or other reasons they become further discounted in the next 5 years. However there's more a chance that they're true value is adequately discovered while one stays on the sidelines. The margin of safety for them is great and of course we'll be free to see after a few plus years.
I also wouldn't bet on interest rates rising (or falling). Market consensus for their current price is usually pretty good and there are many reasons why interest rates are historically low and likely to remain roughly so.
And the Fed is at zero percent. Name another period where zero percent rates ever existed, and how long did it last? When the money supply has grown 50%+ over the last year how are we avoiding inflation, and if inflation kicks up how are we avoiding higher interest rates?
If Zapier nets 25% after taxes, it’s valuation is 150x earnings.
And Shopify, Square and Tesla’s valuations are even more absurd.
Valuations are always determined by the NPV of future earnings, discounted for time and cost of money. Given rising interest rates all of these valuations will get slashed substantially.
It’s a bubble, after the internet bubble it took Amazon 7 years to trade back to its bubble price. Cisco never has.
Here's an article that has a frequency chart based on valuation multiples. Keep in mind that, while it's front-loaded with lower multiples, not all business models have the same potential for revenue growth: https://onstartupexits.com/how-to-value-the-exit-price-for-a...
One thing I could have been clearer on is that private valuations should be at a large discount to public valuations. You buy shares at a $5B valuation only because you believe it can IPO close to a $10B valuation, or what is the point of investing?
And a $10B valuation would crazy town.
I suspect I am not their intended customer as I don't get a lot of value out of the dozens (hundreds?) of API implementations they offer. But I wonder how much of that revenue represents customers with similar plans.
The options for me were:
* bump something else to have a dev build out the integration
* pay the monthly fee to enable a non technical person to build the integration (it was on the order of $50/month).
* don't get the work done
I think I've used it at 3 companies since, mostly on the free plan. But when I exceed the plan, I don't have any trouble pulling out the company's wallet to pay for it.
I'm just curious how that went. Was a non-technical person able to learn Zapier enough to carry out the task? Were they totally non-technical, or just not a professional dev?
Thanks, that's what I meant. I think someone who's is tech savvy but not a professional developer would do fine with Zapier, but my guess is that completely non-technical people (who only understand browsers, email, word processors, etc) would struggle.
> Zapier reached $100 million in annualized recurring revenue
They have access to a lot more than a million.