Team Member Name

Job Title

79% recommends it

Barcelona - Spain

I'm a paragraph. I'm connected to your collection through a dataset. To update me, go to the Data Manager. The Data Manager is where you store data to use in your site pages, or collect data from site visitors when they submit a form.

Oscar Arenas

May 15

Edited: May 15

How are platforms and marketplaces valued?

Sameer Singh

Dash

Jun 12Edited: Jun 12

There isn't a simple answer to this because there are many different types of marketplaces and platforms. You could use many of the same valuation frameworks as other startups (revenue multiples being the most common).

There are a couple of valuation multiples more specific to network effects based businesses: 1) Network Value to Transactions (NVT): Basically multiple of total GMV or transaction volume. 2) Network Value to Metcalfe (NVM): Metcalfe's Law says that the value of a network is proportional to the square of the number of users (for 1-sided networks only). Divide the value of comparable companies by that to get a multiple. Caveat that the value of users can vary dramatically across companies (and lifecycle stages).