We analyzed the valuation multiples for the most highly valued private VC-backed companies in the US. How do they all stack up?

Fast-growing private companies are often evaluated using their price to sales (valuation/revenue) ratio. Because these company’s are fast growing and not aiming for profitability (typically), price to EBITDA or profits is less meaningful or useful.

When we previously analyzed Dropbox’s irrational valuation, we found that their sales multiple was significantly higher than public comparable, Box.

So we wanted to extend the price/sales analysis to other unicorn companies. Using CB Insights private company valuation multiple search, we took a look at the sales multiples for today’s US-based VC-backed $1B+ valuation companies. While sales figures are often guarded, our machine learning technology is increasingly picking up on real or rumored revenue figures.

Research Briefing: 2017 Tech IPO Pipeline
We go deep on 369 of tech's highest-value private companies. See the companies, investors, and trends shaping tomorrow’s disruptors before anyone else.

When we analyze the unicorn valuation multiples, we see:

  • Uber had the highest sales multiple of any of the Unicorns, as the $40B valuation company’s last rumored net revenue figure was $400M (on about $2B of gross revenue). And while this may seem very high, for a company growing as fast as Uber, this sales multiple may be viewed as completely rational by investors.
  • Slack also sits atop the price/sales multiple rankings as well along with Uber driven in part by its explosive growth (which has given it a lofty valuation) with still relatively modest revenue.
  • More traditional, consumer-focused businesses were on the other end of the spectrum, with online retailers Gilt Groupe, JustFab, and Kabam all sporting sales multiples of 2.5x or less.

See below for the full breakdown. Companies that do not have significant revenue stream incorporated in their businesses yet or which have not begun monetizing at all were obviously not included (think Pinterest or Snapchat).

Sales multiples unicorns 201415

 

Want more sales multiple data for today’s most-valuable private tech companies? Login to CB Insights or sign up for free below.

 

  • ivodotvc

    What I don’t really get is why we keep using the $40b “valuation” for Uber/Slack. These valuation are misleading as they imply that the preferred stock VC’s buy is everything the company is made of. You wouldn’t use an option on a stock to determine market cap, so why are we acting as if the company is built entirely of preferred stock?