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> TechCrunch has obtained documents that show Pinterest has been forecasting $169 million in revenue this year and $2.8 billion in annual revenue by 2018. So i
by jgalt212 11y ago
> TechCrunch has obtained documents that show Pinterest has been forecasting $169 million in revenue this year and $2.8 billion in annual revenue by 2018.
So in three years, they'll have to grow revenues by 16.5X. These sort of outlandish growth assumptions necessary to substantiate their valuation is exhibit A as to why the a16z valuation is extremely suspect.
Of course, 16.5X growth is doable when you are starting from a low number, but $169MM ain't spit.
And all the being said, $169MM for 2015 is just a forecast, so if they miss on Q4 numbers, the 16.5X assumption can easily be 20-25X.
On the plus side, their revenues per active user target of $9.34 is relatively modest, and I think doable as FB does $4.18 per user per quarter in revenue.
- nugget 11y agoAdvertising platforms can scale that fast. What if they are only monetizing 5% of pin boards at the moment? Going to 100% coverage would be 20x. Devil is in the details but order of magnitude growth isn't out of the question.
- petercooper 11y agoJust some more data to support your point. Some research by Institutional Venture Partners in 2013 showed that in companies over $150M in revenue, around 30% revenue growth per year was the median, so 155% per year (16.5x growth over 3 years) is incredibly keen.