A little bit about the company
That's a cookie cutter Internet ads DSP shop with few buzzwords painted over on top, namely the alleged "smart AI algorithm." Something now standard.
Cluep, a Canadian startup that raised just $500K, acquired for $40M
21–29 of 29 posts
Re: Cluep, a Canadian startup that raised just $500K, acquired for $40M
#22Lots of people think about the low rev multiplier but maybe a) the founder, all being quite young, just wanted out and do something new, b) the money is all in cash without strings attached or c) they have a sense that with the GDPR in europe and similar laws possibly coming up elsewhere their company and revenue might plateau rather soon.
If someone offered me >10 million, I'd take the money and run.
Re: Cluep, a Canadian startup that raised just $500K, acquired for $40M
#23Good for them, with just a 500K investment I would guess the following 1. The founders should own at least 75% of not more which gives them a neat 30M in this deal. 2. As others pointed out, why such a poor multiple on revenue? The possibility is that they had a service heavy business (ie bulk of revenue came from service to customers). 3. From point 2, they mostly had negligible or no IP. If they had significant IP…
What is the name of the aforementioned acquired Startup?
Re: Cluep, a Canadian startup that raised just $500K, acquired for $40M
#24Can anyone shed some light on that revenue multiplier? Seems pretty low for a growing company.
It's possible they book or publicize revenue like 'ad sales' in which they only take a commission. So their gross margins wouldn't be huge.
Re: Cluep, a Canadian startup that raised just $500K, acquired for $40M
#25For context, $500K is a big investment in Canada. Startups here get very little funding. Smart Silicon Valley investors could make bank by investing in Canadian startups for pennies on the dollar.
There are many kinds of investors, while SV more interested in unicorns not pennies.
> Chinese venture capital firms and technology giants are increasingly taking note of Canada’s technology scene, with artificial intelligence as well as clean technology and life sciences some of the areas attracting interest.
> As well as the research capabilities, the lower valuations of Canadian technology companies compared to their US counterparts make them attractive to Chinese investors
https://www.scmp.com/business/article/2130409/canadas-tech-f...
Re: Cluep, a Canadian startup that raised just $500K, acquired for $40M
#26After reading the revenue figures, the sale is a lot less outrageous than the title makes it sound.
Unless their product is extremely manual and depends on hiring on a bunch of engineers to train models for each customer
Firstly, you'd probably want 50% data people, 50% engineers to make that work acceptably. Secondly, that kind of stuff is totally viable to throw automated grid-search at, especially if you've just been acquired by a profitable company.
Finally, I reckon that the comment upstream about GDPR is probably correct. Suddenly facing way harsher terms for 30% of revenue (assuming standard breakdowns) is double-plus ungood, which may have sparked this.
To be fair, if I were them, I'd totally have taken the money and ran.
Re: Cluep, a Canadian startup that raised just $500K, acquired for $40M
#27Good for them, with just a 500K investment I would guess the following 1. The founders should own at least 75% of not more which gives them a neat 30M in this deal. 2. As others pointed out, why such a poor multiple on revenue? The possibility is that they had a service heavy business (ie bulk of revenue came from service to customers). 3. From point 2, they mostly had negligible or no IP. If they had significant IP…
What is the name of the aforementioned acquired Startup?
It's a private deal and unfortunately I cannot reveal due to the non disclosure terms.
Re: Cluep, a Canadian startup that raised just $500K, acquired for $40M
#28“Everyone loves a tale of a bootstrapped startup founder’s journey to an eight-figure exit.” How is raising $500,000 bootstrapping?
The point is that they grew their business mostly out of revenue. Yes you can get into a technical discussion of what a self-funded company is, but it generally misses the point. Setting yourself up so that you can be sustainable out of revenue at times requires a different approach and mindset which is at the core of self-funded companies.
But bootstrapping has a binary definition. You have either raised money or you haven't. And there is a huge difference between $500k and $0. And I don't say that in the theoretical sense. I currently run a bootstrapped company that does $10m+ in revenue and $500k is still a huge amount of cash for us that would change the way that we conduct business. I can't imagine how big a difference it would have been in the early years of the business.
Re: Cluep, a Canadian startup that raised just $500K, acquired for $40M
#29Earlier quoted context omitted.
What is the name of the aforementioned acquired Startup?
It's a private deal and unfortunately I cannot reveal due to the non disclosure terms.
Why would you agree to those disclosure terms?
Would they have walked if you told them you wanted it taken out of the agreement?
Why I ask: curious why people agree to gag orders and similar for no justifiable reason.