My gut reaction to seeing this headline was shock at the sticker price. I did some more research and found some more interesting numbers for this company.
They raised 204.5 Million dollars over 9 venture financing rounds. They have approximately 800 current employees. Does any of this seem wild to anyone else?
>They raised 204.5 Million dollars over 9 venture financing rounds. They have approximately 800 current employees. Does any of this seem wild to anyone else?
This honestly sounds pretty reasonable to me. They made a ~5x exit after 10 years of raising funds and developing the site. Glassdoor easily has the most reliable salary and job data for software engineers that exists, even beyond LinkedIn which Microsoft just paid $26 billion for, and that's incredibly valuable. I see this entirely as a smart acqui-hire and data acquisition move. Nothing to do with revenue.
My whole point is that any revenue from Glassdoor is meaningless and irrelevant. Their data is so valuable to the current business of a company that runs multiple recruiting firms that it's just a cost of doing business for them.
Much of the world prefers riding the bubble to FOMO. The frothier it gets, the less need for and meaning held by useful indicators. It's human nature :/
Look at Recruit’s existing line of business and revenue. The bigger question, to me, is what happens if Google decides two sites dominating their organic listings is not welcome.
Massive backlash, claims of bias, lobbying and negative PR pieces, and more than likely regulations would then follow, putting at least a sizeable damper on their business and an unforeseen impact on future business. Companies with millions of dollars available to them will not go down without a fight.
So froogle/shopping.google all over again? I think Google made the change in 2012[1] with no meaningful backlash in the US and a fine in the EU they are appealing. So I think the lesson is that Goog can do whatever they like with job searches.
Glassdoor seems like a pretty simple website, but it's still the main platform for company salaries and reviews. That data allows them to get a piece of the huge recruiting market. Compare to LinkedIn which is 20x more expensive.
Not just recruiting, but evaluation and screening as well. Most people here are probably only looking for high-paying white collar jobs but Indeed does a huge business in front-line and blue collar postings. Now they're offering screening between application and in-person interviews and can take care of a lot of the filtering work that used to mean a huge pile of resumes. I see the GD purchase as breadth while they're also moving up & down the HR pipeline simultaneously.
Recruit is kind of a funny setup - itself it's not that large (I think around 800 people) but it owns/controls companies totaling tens of thousands of employees worldwide.
1) It's targeted to a really broad audience
2) It has a profitable but affordable pricetag
3) The grafics still look good and will continue to do so
4) Microsoft has three big platforms where it runs
According to Google, Minecraft made $23M up to 2011.
2011? In 2011 Minecraft was a very new product compared to where it is now. What Microsoft was purchasing there was a pre-existing virtual world software that already many kids were familiar and comfortable with. It's a world where there's no significant level of concern about inappropriate avatars, and nobody really cares. It's a world focused on construction and design, not on killing off everyone else so that you can be the last survivor. As VR gets better over the next decade, it would be entirely feasible for something based on a Minecraft like world to be a solid base for corporate and educational markets.
No, I mean expecting that a game of this type that has more than doubled in revenue for the past two years to continue to be profitable makes sense. As it turns out, this was an excellent bet, as their next quarters saw revenue increases in the hundreds of millions.
Two years later, they continued to increase sales of the game, selling about 20 million copies in 2016.
I know it's a larger scale, but if an indy podcast developer can develop his own ad platform just for his application does it really take that large of a team?
Selling and serving ads takes a lot of work. I worked at a 50ish person company, and we had 3 people working full time on selling ads, along with my 4 person product/engineering team who probably spent about 50% of our time working on our ads platform/integrating with other company's platforms. There's a lot of complexity in this space, especially when trying to optimize for a global market and making sure you keep customers happy.
According to another HN commenter, they were making over $170m in revenue and were growing 30% year on year. A 7x multiple on sales does not seem that weird for a price. it is way more reasonable than 90% of the unicorns startups we see now.
Shock because the price seemed to high, or too low? This seems reasonable / a good deal to me. I recently found the website useful- they have a lot of data, and offer a good incentive to acquire more data (Add a salary / review to see more).
I think the price was too high. However this is without the knowledge of the size of the operation, or their sales numbers. I think a lot of people are going overboard with the data is the new oil philosophy, as the rate in which data is being generated is growing exponentially. Since the supply of information has increased so much one would reason that its value should be decreasing, not increasing. (Presuming that there is no uniqueness or monopoly of the type of data)
Another HN commenter mentioned their sales numbers at $170M and growing at 30% annually. Why do you think a $1.2B price is high? it seems pretty reasonable for me. Buying at 7x total sales with a 30% growth rate seems like a normal purchase price.
I didn't see that until after I posted the previous comment. That number certainly changes the conversation, however I'm usually a fan of valuing companies via net profit instead of revenue. Although I will admit that valuing startups is a whole different ballgame than traditional companies.
It's very hard to value most companies that are at this stage on net profit because most of them are just breaking profitablity (so their net profit will be 0). Basically if you valued companies on net profit you would never acquired a startup (since most of them are unprofitable). Thus, they tend to use other financial metrics (including total sales) and also build a business operating plan to ensure the company can move to profitablity. This is the case for all companies in the early stage (it's not something new to the internet age).
The expected path for startups is:
1) find product market fit
2) build growth
3) build revenue
4) move to a sustainable operating model where at least your gross margins are positive
5) move to cash profitability
6) congrats you've made it and now are a normal sustainable company
Glassdoor was on step #4 and was probably close to #5. Valuing based on net profit would only work on companies in step #6.
I was guessing like a team of 20, maybe a third of which software/devops. 800? Jesus christ, unless they're counting mechancial turk penny modearators as employees then I'm speechless.
Whats the ultimate goal revenue wise? Something like -
Hey HR at XYZ. Pay $xxx to see which redacted current and old employees said you were shit. Trim the snitches with Recruit Holdings..
They raised 204.5 Million dollars over 9 venture financing rounds. They have approximately 800 current employees. Does any of this seem wild to anyone else?