January Update from the Flippa CEO

    A Message From Our CEO  Hi , It’s time for a monthly update! Each month we obsess over data and your collective feedback to make decisions about the Flippa product and / or cast judgement on the direction of the digital real-estate industry. This is the data and the feedback we are listening to this month.  First the data - Valuations POPPED last Quarter. We analyzed over 200 transactions between $10,000 and $2,500,000 and found that the average was 3.31x Annual Net Profit. Curiously, Content / Advertising assets averaged significantly higher multiples than the cohort, representing a 5.64x net profit multiple. What you should know? This can be very misleading. Very high multiples are more often than not, indicative of under optimized assets. In other words, the asset is a renovator's delight. Buyers will ‘overpay’ when there’s very significant under utilization. This is a great thing but it’s an important aspect of the digital real estate space which should be acknowledged. While the perception is that all valuations are ballooning, average multiple references are more likely to be inflated by these beautifully under optimized assets. InspiringTips.com is a great example. The site was making nearly $1,700 per month and it was acquired for $85,000, representing a 4.2x net profit multiple. Why? The site has strong traffic, but is only making $2 per 1,000 page views. It could be making up to $15 per 1,000 page views. Given the opportunity, this is a very reasonable price. Optimize and win big! This is the raw data - [The Exit Podcast](  Now the feedback - Buyers want to stand out more. It’s a competitive market and you want to showcase your strengths. This may include referencing total transactions (we do already have this), overall annual budget (how much you have to spend), speed of sale (historical evidence of a quick close), or whether you are an institutional, corporate or individual buyer / investor. This is an example of what we have heard recently: “I’ve spent over $1.5m on the platform across 15 transactions. Can my profile be enhanced so sellers know who we are and how fast we can move? We could do so many more deals if our profile stood out.” Makes sense, but it’s a real challenge. We certainly don’t want to bias historical buyers and isolate or ostracize new buyers. So, tell me what you think. As a buyer, how would you like to be presented to sellers? Flick me a note at CEO@FlippaMarketplace.com.  My favorite deal - And finally, my favorite acquisition last month was the sale of [NinjaOutreach](. It was a $2.5m acquisition and it was interesting for a few reasons. a) The buyer demand was awesome with over 70,000 listing views. For me, this is representative of the type of demand a good SaaS owner can expect on Flippa. After all, we do have the world's largest base of digital real estate buyers. b) The category is hot. NinjaOutreach is a tool for managing influencer marketing - arguably the greatest evolution of the marketing mix in the last decade. c) The buyer is more interested in eCommerce. This was a complimentary acquisition aimed to assist other portfolio companies with influencer marketing. [Read more about the sale here](. Good luck this month and happy hunting. Blake CEO@Flippa#1 Marketplace to Buy & Sell Digital Real Estate  This data in this email in so far as it relates to a business or asset listed for sale on Flippa has been provided by the seller to Flippa. Flippa has not independently verified any of the information about the business and assumes no responsibility for its accuracy or completeness. 

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