Is it just me or is the number kinda low, based on Venmo's success so far (and the financial predictions)?
Seems high to me. Minimal traction in a difficult-to-make-money niche (paying people you know).
Braintree Buys Venmo for $26.2 Million
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Re: Braintree Buys Venmo for $26.2 Million
#22Is it just me or is the number kinda low, based on Venmo's success so far (and the financial predictions)?
Their pricing is 3% on credit cards, and 0 on everything else. At best they would see 1% margin on credit cards, so $250M at 1%, is $2.5M/year. 10X optimistic projected revenue is a great deal for Venmo, and BrainTree is getting a functioning custodial account system and the team that built it.
Re: Braintree Buys Venmo for $26.2 Million
#23Is it just me or is the number kinda low, based on Venmo's success so far (and the financial predictions)?
The number is a reflection of 3 things:
- Multiple of revenues - Tech acquired vs time to build and opportunity cost. - Braintree's perception of how much they can aggressively grow the offering when they offer it to their much larger customer base
So it is what it is.
Re: Braintree Buys Venmo for $26.2 Million
#24Earlier quoted context omitted.
Thanks, Ivan. For those who are wondering, the Venmo apps aren't going away: http://bit.ly/bt-venmo
Interested in revenue vs exit valuation... Can you say anything about it? The margins must be phenomenally low if the valuation was only 10% of what you process yearly ...
If you process $260mm and charge 0% it's not really fair to view $26mm as a 10% revenue multiplier.
(Even for the small part of their business funded by credit cards, there's a $500 per customer lifetime exemption, and 3% minus higher fraud rate and 2-2.5+% CNP processor and interchange still puts their revenue at less than a small team's salary with 100% credit cards, and probably less than $100k/yr revenue on credit cards overall.
They're obviously being bought for team, technology, and growth potential; current customers are just traction, not revenue.
Re: Braintree Buys Venmo for $26.2 Million
#25[deleted]
Re: Braintree Buys Venmo for $26.2 Million
#26Congrats! I went to school in Philadelphia, I think Kortina paid for cheesesteaks at a hackathon once..
That's a tradition--we'll be doing the same at pennapps again in a few weeks.