Jeff Bezos this week released Amazon’s annual shareholder letter, highlighting the growing ratio of third- to first-party Amazon merchandise sales. Over the history of the company, third-party sales have grown at a 52% lifetime CAGR to now represent 58% of the platform’s total merchandise sales (or $160 billion), compared to the first-party sales’ CAGR of 25%. Bezos also noted that independent seller sales on Amazon continue growing faster than on eBay, which in the same period have grown 20% (reaching $95 billion total).
The world of software IPOs this week saw PagerDuty’s stock soar over 50% following its market debut at $37 per share. PagerDuty, which offers software for technical teams to identify and resolve malfunctions, is the first major software IPO following Lyft’s last month. Originally priced at $24 Wednesday evening, the stock opened at a 50% on its first trading day, granting the company a $2.75 billion valuation. PagerDuty revenue rose 48% last year to reach $117.8 million, and most recently raised $90 million at a $1.3 billion valuation in an investment round led by T. Rowe Price Group in September of 2018.
In digital marketing and SEO news, Google announced that a de-indexing issue which caused many site owners to see their pages display as not indexed in Search Console has now been resolved. Due to a technical issue, affected URLs were mistakenly removed from search results, thus impacting traffic to publishers’ sites. While some Webmasters were able to get around the issue by requesting re-indexing, Google has announced that the issue is now resolved.
New in Platform-as-a-Service business listings this week we have a $195K Educational Services Platform business, with a lucrative recurring revenue model and thousands of active users, impressive revenue compounded annual growth rate of c.51.4% for the period 2016 to 2018, robust database of over 7,900 tutors across all 50 states and lean operating cost structure with minimal overhead. If you are interested in this business, please follow the link to request a prospectus.
Thank you again to everyone who came to LTV Conf 2019! We had such a fantastic time meeting the 300 Founders, Executives and Investors in the space who helped make this the best SaaS event in New York, and look forward to seeing familiar faces at LTV Conf 2020. Super early bird tickets have already gone on sale, so if you are already planning your 2020 conferences calendar, make sure to grab a discounted ticket at LTVConf.com.
In other events news, the FE team had a great time at BoS Cambridge meeting with fellow tech entrepreneurs and some old FE friends! Founder Thomas Smale will be heading to SaaStock LatAm in Sao Paulo, Brazil on April 23-24, where FE International will be hosting a networking drinks event for attendees. Make sure to come say hello if you will be in attendance, or reply to this email to set up a meeting if you will be in the area!
Continue reading below for more on the Amazon shareholder letter, PagerDuty’s IPO and Google’s de-indexing update.
- Platform-as-a-service with a lucrative recurring revenue model and thousands of active users
- Impressive revenue compounded annual growth rate of c.51.4% for the period 2016 to 2018
- Robust database of over 7,900 tutors across all 50 states
- Lean operating cost structure with minimal overhead
Yearly net profit: $59,000
Asking price: $195,000
- Profitable Amazon Merch business on the 6,000 Pro Tier
- Strong revenue growth of c.68% CAGR between 2016 and 2018
- c.3,500 product sales in the past year with over 1,750 unique designs
- Well-received product with positive user reviews
- Simple operations with low owner workload requirements
Yearly net profit: $19,100
Asking price: $50,600
In the News…
Bezos Releases Shareholder Letter
Jeff Bezos published his annual Amazon shareholder letter, which focused heavily on the success of third-party sellers on the platform.
In the letter, Bezos poses the question of why sellers have done so much better on Amazon’s platform than on eBay, positing that their investment in third party sellers’ ability to compete with first-party sales as well as “offering them the very best selling tools we could imagine and build” empowered sellers to be successful. Bezos highlighted tools for inventory management, payments processing, shipment tracking, reporting and international sales contributing to the success of third-party sellers (noting Amazon’s significant financial investment in these tools).
Bezos also touched on the response to Amazon Go, saying the response to their line-less brick and mortar stores has been extremely positive. Amazon currently has 10 stores in Chicago, San Francisco and Seattle.
PagerDuty IPO Rises 50% on Market Open
Software company PagerDuty experienced a 50% rise upon market open in its Thursday IPO.
Originally priced at $24 on Wednesday evening, PagerDuty opened at $37 per share on Thursday morning. As the first major software IPO following Lyft, the strong performance so far could serve to renew investor confidence in the power of software initial public offerings. The “DevOps” market is expected to reach $10.3 billion per year by 2023; in 2018 it was a $3.4 billion market. Bessemer Venture Partners’ Ethan Kurzweil (one of PagerDuty’s main investors) has stated that developer tools like PagerDuty are gaining significance as software becomes an integral part of business operations.
Founded in 2006 by two former Amazon developers, PagerDuty counts Atlassian and Splunk among its competitors.
Google Resolves De-Indexing Issue
Following a technical bug, Google has announced that the issue causing certain pages to de-index has now been resolved.
Over the past couple of weeks, some webmasters and online publishers had noted that their pages were showing up as “de-indexed” in Google Search Console. Several URLs were delisted from their search index, resulting in pages being removed without publishers knowing why. This impacted sites’ traffic because web pages were removed from search results; those who submitted complaints to Google had their pages restored. Following more than a week of issues (and one false “everything is fixed”), the issue has now been confirmed corrected by Google.
To double check your pages, you can use the Google Search Console Inspect URL and Submit to Index feature for any overlooked pages.