Adyen yesterday confirmed plans first announced in April to file for public listing on the Amsterdam stock market. Adyen has remained profitable since 2011, which sets raising new funds at a low priority for the IPO, instead serving to fuel the company’s continued expansion of new products into new regions. Adyen’s 2017 financials reported net revenues for the fiscal year ending December 2017 at $255.45 million, with total processing volume growing to $126.23 billion from $77.2 billion the previous year and the company remained profitable on an EBITDA basis in 2017 ($116 million) with margins of 45.5%. J.P Morgan and Morgan Stanley are serving as advisors on the deal.
Elsewhere in the world of digital commerce, Adobe Systems announced this week that they have acquired Magento in a $1.68 billion deal. Expected to close in September, this acquisition is Adobe’s biggest bid yet for a foothold in the digital-commerce industry. Magento will be Adobe’s third-largest acquisition ever, and will help the SaaS company compete with incumbents in the marketing, sales and services product suite space.
New in SaaS business listings this week we have a $534K real estate information software business, with an authoritative position in the growing online real estate niche valued at $217 trillion, a strong CLTV to CAC ratio of 4.1x, highly automated product allowing for low owner involvement and an excellent traffic profile with over 1.1 million unique users in the past 12 months. Also listed in SaaS businesses this week we have a $93K B2B & B2C productivity software business with a proven market fit with thousands of five-star ratings, authoritative brand with over 5 years of operating history, diversified and consistent revenue stream and low owner workload requiring only a few hours of maintenance a month. If you are interested in either of these businesses, follow the links to request a prospectus.
In events news, Founder Thomas Smale had a fantastic time attending Business of Software Europe in London, where FE served as a lead sponsor. Thomas also attended SaaStock Helsinki this past week, where he enjoyed hearing about and sharing ideas around the latest insights in SaaS. Next up, Thomas is attending SaaStock Berlin on June 7, so make sure to reach out and set up a meeting if you will be in the area!
Continue reading below for more on Adyen’s IPO, Adobe’s acquisition of Magento, and Alibaba’s change in price-target.
- Authoritative position in the growing online real estate niche valued at $217 trillion
- High customer lifetime value to customer acquisition cost ratio of 4.1x
- Highly automated product allowing for low owner involvement
- Excellent traffic profile with over 1.1 million unique users in the past 12 months
Yearly net profit: $199,000
Asking price: $534,000
- Proven market fit with thousands of five-star ratings
- Authoritative brand with over 5 years of operating history
- Diversified and consistent revenue stream
- Low owner workload requiring only a few hours of maintenance a month
Yearly net profit: $28,000
Asking price: $93,000
In The News…
Adyen Confirms June IPO
Adyen has this week confirmed they will be listing the company to IPO on Amsterdam stock markets.
The payment processor’s announcement follows years of software innovation as a B2B service provider for retail merchants. While a fundraising target was not provided, current stakeholders will sell up to 15% of shares, a value of $1 billion. Adyen is currently valued between $7-11 billion, according to Reuters, and had last publicly confirmed its valuation of $2.3 billion back in 2015 while raising funds from Iconiq. Investors in the company have contributed a total of $226 million to date, and 2017 financials came in strong for the company: 2017 revenue reached $255.26 million, a 36% increase on 2016 revenue. The outlook for 2018 is also positive, as 1Q’18 revenues came in at $28.22 million, a $11.7 million YoY increase. Adyen was also profitable on an EBITDA basis, ($115.92 million) with margins of 45.5%. “We feel that we are still in the early stages of a remarkable journey. Our focus remains on building new functionality and on helping our merchants grow,” said CEO Pieter van der Does.
Key Adyen customers include Uber, Tory Burch, L’Oreal, Dunkin Donuts and Microsoft.
Adobe Acquires Magento
Adobe has this week announced they will acquire Magento, a leading platform for e-commerce merchants.
Magento currently serves 260,000 merchants and currently supports $155 in gross merchandise volume. In the press release announcing the deal, Adobe cites Magento’s capabilities for enablement and order orchestration of physical and digital products across industries as a key value-add. The $1.68 billion Magento acquisition is a logical opportunity for Adobe; with a customer base of high net-worth clients on both platforms like Louboutin, Nestle and Coca-Cola, Adobe has acquired an opportunity to upsell the Magento customers. Ultimately, the acquisition stems from Adobe’s play to a high value market of companies with the resources to spend on developing a marketing strategy.
Hillhouse Capital Group is the primary investor in Magento since the company went back to being private in 2015 after having been purchased by eBay in 2011.
Alibaba Price-Target Raised
Analysts at Raymond James have increased the Alibaba price-target to 300 from 250.
Citing growth drivers in the e-commerce space, like increased personalization and targeting as well as high competition for ad slots, analyst Aaron Kessler at Raymond James reiterated the stock as a strong buy. Wall Street has a generally positive outlook on the e-commerce industry, as it is currently in a period of double-digit growth. In a report to clients, Kessler commented on the current climate of the industry stating, “We expect continued robust China e-commerce growth with Alibaba as the biggest winner,” estimating that Alibaba has a 70% market share in China. Overall e-commerce revenue in China totaled $950 billion in 2017, with growth rates of 30% year over year. Fourth quarter earnings for Alibaba came in strong, and guided year revenue growth surpassed analysts’ estimates.
Alibaba’s cloud revenue more than doubled, reaching $699 million, while core commerce revenue increased 62% to $8.2 billion for the last year.
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