It seems like a pretty good deal for Recruit Holdings, and market correct.

If Glassdoor was at about ~$100m ARR growing 30% a year (suggested by press, but I have no actual first-hand data), then public market comps suggest the deal sounds “market” at maybe 7x-9x 2019 revenues. The mean is 7x (see below) for top public SaaS market leaders.

Add in that Glassdoor has a significant moat in its content and community, and it sounds like a pretty strong deal for Recruit Holdings.

Glassdoor in turn saves the dilution and risk in IPO’ing — and Recruit Holdings is paying all cash. The likely calculation was with dilution and risk over saying No, could Glassdoor be worth $2b+ after an IPO in another 12 months?

(For AppDynamics, which sold at $3.6b to Cisco, the calculation was would they be worth $5b or more in another 18 months post-IPO or sell today for $3.6b. They decided $3.6b today was better than a possible $5b down the road, even with very strong metrics as well).

It sounds like Glassdoor certainly could have been worth $2b+ in 12–18 months, but with a lot of pressure on growth and to keep the growth up. That pressure can be fairly intense.

This is a strong exit in the Best of Times for SaaS. Times could get better, but it’s hard to imagine too much better.

Strong argument to take it.

View original question on quora

Related Posts

Pin It on Pinterest

Share This