Zoom, the popular videoconferencing software company, listed on the NASDAQ this week at $60.76, a stock market value of $15.9 billion. Zoom is unique to several of the recent software IPO due to its profitability (2018 saw net income of $7.58 million). Taking its opening price market cap, Zoom trading at c.50 times its enterprise value, by far the highest multiple for a US software company..
In e-commerce news this week, Amazon has announced they intend to remove their e-commerce platform presence from China beginning July 18. The e-commerce giant announced to sellers on Thursday that it will no longer operate a marketplace or provide seller services online, but instead focus on shipping goods into China. Amazon first entered the Chinese market 15 years ago, and had struggled to gain market share from competitors Alibaba and JD.com.
With the US tax season just at its close, we at FE International have received an influx of calls from entrepreneurs looking to deploy excess capital from tax refunds into digital assets. If this is a situation you are in, feel free to schedule a call with one of our expert advisors to discuss the best course of action for your business goals.
One such acquisition target could be the newly listed SaaS $710K Digital Sales and Marketing business, which boasts over 5,200 Shopify installs and a 95% user satisfaction rating built off a clear value proposition driving an impressive c.6.3% CMGR over the L12M. If you are interested in this business, please follow the link to request a prospectus.
In events news, Founder Thomas Smale is off to SaaStock LatAm next week, where FE International is proud to be a global sponsor! We will be hosting a happy hour networking drinks event at the venue following the conference, so click here to RSVP if you will be in attendance!
Continue reading below for more on Zoom’s IPO and Amazon’s decision to leave China.
• Well-received software with over 5,200 installs on Shopify and clear value proposition in a rapidly-growing niche
• Steady growth with revenues reaching an impressive c.6.3% CMGR over the L12M
• Impressive customer support satisfaction rating of over 95%
• Proven track record of paid customer acquisition via advertising
• Low-touch operational model with a professional team staying on post-sale
Yearly net profit: $200,000
Asking price: $710,000
• Strong brand firmly positioned in the fashion & accessories niche
• Wide market acceptance with hundreds of five-star product reviews
• Diversified SKU base with no single product driving more than c.3% of earnings in the LTM
• High-quality product offering driving more than c.4,000 monthly orders over the LTM
• Established supplier relationships allowing the business to maintain stable unit economics
Yearly net profit: $121,000
Asking price: $319,000
• Feature-rich software with a clear value proposition in the rapidly growing email support and automation niche
• Impressive YoY growth with revenues reaching c.48.9% CAGR for the period 2016 to 2018
• Strong SaaS metrics with high LTV of c.$421 in the LTM
• Low owner involvement creating plenty of time to invest in growth
Yearly net profit: $121,000
Asking price: $319,000
• Diversified portfolio of two complementary websites in the lucrative games niche
• Robust backlink profile from authoritative sources such as Wikipedia
• Strong SEO presence with the sites ranking for over 23,000 organic keywords
• c.190 live articles with a c.1,500 average word count
• Simple operations with low owner involvement
Yearly net profit: $32,000
Asking price: $93,000
SaaS – Customer Loyalty & Retention POS Software – $4.7K MRR
In The News…
Zoom Opens Up 80%
The popular videoconferencing software company Zoom debuted on the Nasdaq this week under the ticker symbol “ZM” at an 80% PPS premium of $65.
Raising $356.8 million in its IPO, this initial spike gave Zoom a stock market value of $16.7 billion after its initial valuation of $9.2 billion. Zoom filed with the SEC to go public on March 22, and estimated a PPS in the $28 to $32 range. The stock opened 80% up and closed the trading day at a 76%. Revenue grew 118% to $330.5 million last year, making it one of the few technology companies posting a profit to IPO recently.
Rishi Jaluria, an analyst at D.A. Davidson, said of the company, “We are impressed with Zoom’s rapid growth while generating both cash and GAAP profitability, and enterprise traction. Furthermore, our due diligence suggests Zoom is gaining mindshare and could become the de facto standard for videoconferencing.”
Amazon Exits Chinese Market
Amazon has this week announced it will be removing operations from the Chinese market.
Amazon.cn will no longer operate its domestic marketplace beginning mid-July, according to an announcement by the company. “We are notifying sellers we will no longer operate a marketplace on Amazon.cn, and we will no longer be providing seller services on Amazon.cn effective July 18. Ben Cavender, an analyst at China Market Research Group, commented on the market, “There is too much domestic competition and Amazon lacks the kind of brand awareness that Tmall or JD.com have,”.
Amazon has also stated that it will work closely with sellers to ensure a smooth transition.