Whatagraph Must Invoice 6,250 Marketing Report App Subscriptions per Month For Its €3M Valuation

In its Premium plan, Dutch/Lithuanian startup Whatagraph sells marketing report app subscriptions to businesses for €200 per subscription per month.

They just raised €600K from Open Circle Capital and others.

Valuation

Assume that Whatagraph sold a 20% equity stake to Open Circle Capital.

Then they are valued at €600K / 20% = €3M post-money.

Exit

Assume that this was a seed round.

And that Open Circle Capital wants to make 10x on its winners.

And that they need 2x to compensate for dilution.

Then they want to make 10 * 2 = 20x on their investment.

And Whatagraph needs a €3M * 20 = €60M exit value for its €3M valuation.

Revenue

Assume that Whatagraph trades at 4x trailing 12 months revenue at exit.

And that there is no cash and debt.

Then they need an average €60M / 4 / 12 = €1.3M in monthly revenue for their €3M valuation.

Subscriptions

Whatagraph charges businesses €200 per subscription per month.

Then they must invoice businesses €1.3M / €200 = 6,250 subscriptions per month for their €3M valuation.

For context: the Netherlands had 11,000 medium-sized and large businesses in 2018.

DIY

Different assumptions? That’s certainly possible!

Make a copy of the spreadsheet used for this post (File > Make a Copy…), put in your assumptions and draw your own conclusions.

Originally published at venturevalue.com on March 18, 2019.

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