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Zapier reached a $5B valuation with $1.3M of funding

forbes.com

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Re: Zapier reached a $5B valuation with $1.3M of funding

#61

Post by ab_testing »

artemonster wrote: post #57
toomuchtodo wrote: post #43

Earlier quoted context omitted.

Khan Academy has an amazing collection of videos on finance. I highly recommend it for understanding cash flows, enterprise value, etc. It's helped me transition (one foot out the door) from tech to finance.

Any other good sources, like books or articles ?

The valuation of current tech companies is way astronomical compared to what is considered normal for mature companies.

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.

Re: Zapier reached a $5B valuation with $1.3M of funding

#62

Post by mooreds »

isoskeles wrote: post #24
valuearb wrote: post #11

$5B is a pretty ridiculous valuation for a $140M revenues company.

I am using Zapier because their service was very easy to implement a webhook for what I needed at the time. However, the price is high enough that they're on my short list of vendors to move on from when I have the time to spend building my own integration (not replacing everything Zapier does, just for my use-case). I suspect I am not their intended customer as I don't get a lot of value out of the dozens (hundreds?…

I'll tell you about the first time I started using Zapier. I wanted to move some data from google spreadsheets to some other system (I don't actually recall what it was, it was 2012). I was on a team of three devs supporting a business critical application.

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
Above and beyond the value of the UI and uptime managed by someone else, the fact that it could get done by a non programmer made the monthly fee very worth paying.

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.

Re: Zapier reached a $5B valuation with $1.3M of funding

#63

Post by mooreds »

ineedasername wrote: post #40
staunch wrote: post #21

Zapier is a good example of copying a good idea (IFTTT) and fast-following with good execution. Sure, copying can seem lame, but Google was copying Alta Vista, Facebook was copying Friendster, Microsoft was copying everyone, etc. Good ideas are important but good execution is more important.

It's also unclear just how much IFTTT influenced that start of Zapier. IFTTT was announced only about 10 months earlier than Zapier. Zapier announced right around when IFTTT has a live prototype. REST APIs were really hitting popularity at that point, so services like these were becoming more & more obvious-- simultaneous invention is a thing. [0] Also, years earlier, there had been a relatively similar offering from…

RIP Yahoo Pipes! It even had a GUI editor. Reminded me of an ETL tool much more than Zapier did (even though in some ways that is what they both are).

Re: Zapier reached a $5B valuation with $1.3M of funding

#64

Post by sjg007 »

_jxdz wrote: post #54
bradlys wrote: post #16

Congrats to the founders for not taking much funding but for employees... this has to suck unless they get to sell their shares to Sequoia as well. (If they even got any options...) Maybe they don't compete for SV talent and most employees aren't used to even getting options as part of compensation. Is there a specific reason a company would have IPO in mind but wouldn't say they are looking to do an IPO eventually?…

I believe only a few of the original Zapier folks have options (I don't hold any myself, for example but I joined when they were around 70 people).

So without options, why did you join?

Re: Zapier reached a $5B valuation with $1.3M of funding

#65

Post by jeremy_k »

alexashka wrote: post #30

This company reminds me of library vs service topic on here a couple of days ago. 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, li…

Who are these engineers that would have built these free libraries?

Re: Zapier reached a $5B valuation with $1.3M of funding

#69

Post by supernovae »

didibus wrote: post #66

So Zapier is like a later competitor to IFTTT ? But basically the same thing?

IFTTT kinda gave up in comparison to Zapier - zapier has so many api/service/framework/tool interfaces where IFTTT kinda just went niche with home automation and basic stuff beyond that.

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

Re: Zapier reached a $5B valuation with $1.3M of funding

#70

Post by throwawayyipyip »

ab_testing wrote: post #61
artemonster wrote: post #57

Earlier quoted context omitted.

Any other good sources, like books or articles ?

The valuation of current tech companies is way astronomical compared to what is considered normal for mature companies. 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,…

Well, to some extent it is. You can argue both ways, and in Zapier's case, I'd say it's overvalued as the 10-15 range assumes obtaining a monopoly. I don't see how Zapier will do that since there's also IFTTT and other services I've tried.

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

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