This year’s Black Friday saw record-breaking U.S. online sales of $5.03 billion. This record was short lived, however, with reported Cyber Monday sales of $6.59 billion, taking the total for Nov 1 – 27 to $50 billion, up 16.8% YoY. Analysts now believe this may be the first year where online sales during the holiday period break the $100 billion mark in the U.S. China’s Alibaba still holds the e-commerce record for one day of sales during China’s “Singles Day”, at $25.4 billion. Interestingly, the YoY growth in smartphone sales outpaced overall growth levels, hitting $1.59 billion, a 32.2% YoY increase.
While the U.S. debates tax reform, Italy’s Senate Budget Committee also approved its own tax changes, imposing a flat 6% tax on digital sales made by companies in Italy. This is expected to add €114 million per year to the government treasury from 2019 onwards. Other European countries like France, Germany and Spain who have sympathized with efforts to tax digital sales revenue could likely follow suit when implemented.
In other tax news, Coinbase has been ordered by a San Francisco-based judge to release information to the IRS with regards to the identity of users with more than $20,000 in annual transaction on its platform between 2013 and 2015. The IRS is aiming to reconcile the relatively modest returns posted on tax returns from crypto-investments versus the huge growth of cryptocurrencies like Bitcoin, and will start by analyzing the c.10,000 accounts released under this order.
Nordic startup entrepreneurs got a boost this week, with The Nordic Web launching an angel investment fund for startups located in the region. With the goal of granting a chance to more and more emerging startups in the area, The Nordic Web plans to invest in 10-15 startups across Denmark, Finland, Iceland, Norway and Sweden over the next 12 months. Entrepreneurs in these countries can submit their pitchdeck here.
New in SaaS listings this week is a $397K translation and interpretation digital service business, rapid revenue growth with a strong compound annual growth reaching 10% in the last 12 months, website traffic of c.100,000 visitors in the past year, an authoritative brand in the growing interpretation services niche, and low owner involvement. Also listed this week is a $36K B2B SaaS business in the productivity management niche, with strong MRR growth reaching a 40% compound monthly growth rate over the last six months, robust feature base with c.75 customers, low customer churn of just 1.4% over the past three months, and low owner involvement.
New in e-commerce listings this week is a $50K Amazon Merch business, with a rapid revenue growth reaching 140% compound monthly growth rate over the trailing six months, 475 unique designs in the lucrative 1,000 Amazon Merch tier, a lean and efficient cost structure creating a scalable business model, and low owner involvement. If you are interested in any of these listings, follow the links to request a prospectus as competition is already high for these businesses.
In event news, Founder Thomas Smale will be at Capitalism/FreedomFastLane in Austin next week on December 7-9 and is looking forward to seeing some familiar faces. Will you be in town for the conference? Shoot us a reply to this newsletter so we can set up some one on one meetings. The FE team is also excited about our upcoming Holiday Networking Social at the Boston E-Commerce Meetup on Wednesday December 20. RSVP here to come enjoy the holiday season with peers from the industry and chat about what trends we’re all looking forward to in 2018.
Continue reading below for more on Italy’s digital tax, The Nordic Web’s VC fund, Coinbase’s court order to divulge high-value cryptocurrency investor info, WeWork’s acquisition of Meetup, and broken Black Friday shopping records.
Deal Highlights
New:
Digital Service – Translation & Interpretation Services – $49K gross/mo
- Authoritative brand offering a secure foothold in the growing interpretation services niche
- Rapid revenue growth, reaching an 10% CMGR over the trailing 12 months
- Strong website traffic with over 100K visitors driving 200K page views in the past year
- Highly scalable business model with a remote team willing to stay on post sale
- Low owner involvement
Yearly net profit: $145,000
Asking price: $397,000
E-Commerce – Amazon Merch – $2.1K gross/mo
- Rapid revenue growth, reaching a 140% compound monthly growth rate over the trailing six months
- 475 unique designs in the lucrative 1,000 Amazon Merch tier
- Lean and efficient cost structure creating a scalable business model
- Low owner involvement
Yearly net profit: $25,000
Asking price: $50,000
SaaS – B2B Productivity Management Solutions – $1.5K MRR
- Strong MRR growth rate, reaching a 40% compound monthly growth rate over the trailing six months
- Sticky product with a low customer churn of just 1.4% over the past three months
- Robust feature base with c.75 customers
- Low owner involvement
Yearly net profit: $16,500
Asking price: $36,000
Sold:
Display Advertising – 10 Year Education/Scholarship Resource – $31K gross/mo
Affiliate – Home Appliances – $4.8K gross / month
Display Advertising – Lifestyle – $4K gross/mo
Affiliate – Gardening – $1.7K gross/mo
Software – Website Maintenance & Development – $1.2K gross/mo
Affiliate – Lifestyle – $1K gross/mo
In the News…
Italy Looking to Tax Digital Sales
Italy announced this week that their senate budget committee has approved a proposal for a 6 percent tax on digital sales.
The appeal for the state is obvious, as this proposal would add €114 million per year to the government’s treasury starting from its inception in January 2019. Under the new plan, a flat 6 percent tax would be applied to all digital sales—including online advertising. When any Italian company purchases an advertisement on Google, 6 percent of the value of the purchase is withheld and paid to the Italian treasury. While the finance ministry still has to define exactly which services are taxable, which they have promised to do by April 2018, it has already been made clear that agricultural companies, as well as companies in flat rate or small taxpayer schemes will be exempt from the web tax, which is intended to target multinational giants like Google and Facebook. This plan follows Italy’s record of pushing the European Union to reform the way tech giants are taxed under the argument that companies should pay a tax on the revenues they generate in the European Union. Under the current method, companies are taxed on profits, which mean they can book profits in countries with the most favorable tax rate and pay minimal taxes even in countries that generate significant sales for them.
France, Germany and Spain are among players considering introducing national legislation on the issue, and if Italy introduces it they would set a viable precedent.
The Nordic Web to Launch VC Fund
A new angel fund begun by The Nordic Web is planning to invest in startups across Denmark, Finland, Iceland, Norway and Sweden.
The Nordic Web is a research and analysis company specializing in reporting data on tech companies emerging out of the Nordic region. Founder Neil Murray reportedly plans for the company to invest is 10-15 startups in the Nordic region over the next 12 months, making it (according to Murray) one of the most active funds in the region. Murray states that “By leveraging the expertise and knowledge of our investors in the fund, we can offer unrivaled support in helping early-stage Nordic startups, with access to a whole community behind them.” Murray also says that over 50 LPs backing the fund, with big names from the region like TwentyThree and Hello Ruby in the mix.
The Nordic Web is early to the investing party in this region, and interested startups can apply for funding on their site here.
Coinbase Releasing Investor Info
This past Wednesday, a San Francisco-based federal judge ruled that Coinbase will be required to supply the IRS with the identities of users with more than $20,000 in annual transactions on its platform between 2013 and 2015.
Cryptocurrency has not necessarily been understood well-enough by the IRS to tax effectively. However, the IRS noticed recently that the number of tax returns claiming gains from virtual currency like Bitcoin did not seem to match the burgeoning popularity of the cryptocurrency as an investment. As a result, they asked Coinbase to effectively hand over a list of investors in an attempt to reconcile the taxes owed, but weren’t entirely successful, so the two entities reached a compromise. Coinbase narrowed the government’s original request down to just a smaller subset of high-value users rather than all users in the $20,000 per annum range, as well as the information requested to just taxpayer ID number, name, date of birth, address, transaction logs and account statements.
The court order applies to more than 10,000 Coinbase account holders and can be read in full here.
WeWork to Acquire Meetup
WeWork has announced this week that they plan to acquire Meetup, a New York City-based community platform that allows users to connect with people with similar interests and goals.
The coworking space leader, worth $20 billion, has been acquiring businesses left and right. Meetup co-founder Scott Heiferman shared the news with internal teams at a company-wide meeting on Monday. The acquisition comes after a massive round of funding in which the coworking giant raised $4.4 billion, fueling their spree of acquisitions. In the last six months, WeWork has acquired Fieldlens, Spacemob, Unomy, and Flatiron School, and bought Lord & Taylor’s flagship Fifth Avenue department store to serve as its Manhattan HQ.
WeWork, which was a coworking pioneer when it launched in 2002, is determined to beat the competition arising around them in Facebook and other social media groups connecting people around cities.
Black Friday and CyberMonday Shatter Online Sales Records
This year’s Black Friday and Cyber Monday proved one thing to us: it’s all about the digital sales. American shoppers alone spent $5 billion in 24 hours, up 16.9% from dollars spent in last year’s Black Friday sales.
Amazon sellers saw record-breaking sales, with over 140 million products ordered worldwide. Interestingly, foot traffic on Black Friday only decreased by an insignificant 1%, indicating that there is room for a burgeoning e-commerce industry and brick and mortar to coexist. Cyber Monday was equally record-breaking, raking in $6.59 billion in online sales, in line with Adobe’s predictions. Brian Field, senior director of advisory services for ShopperTrak, feels that brick and mortar companies have a bright future ahead of them. “There has been a significant amount of debate surrounding the shifting importance of brick-and-mortar retail, and the fact that shopper visits remained intact on Black Friday illustrates that physical retail is still highly relevant and, when done right, profitable,” Field said in a statement. Meanwhile, Amazon said orders were rolling in at record levels. Guess the holidays make room for everyone!
E-commerce owners, what did you do this year to promote holiday shopping deals? Did you find they worked better than last year? Let us know in a reply to this email!