There are theoretical paths to expand revenue. Any site like Giphy that can position themselves as the leader in a segment of the web like gif searching/aggreg

There are theoretical paths to expand revenue. Any site like Giphy that can position themselves as the leader in a segment of the web like gif searching/aggregation can claim ad revenue based on current/potential user volume. In addition, Giphy could pursue things like licensing/marketing deals where companies pay to create/distribute gifs for marketing purposes. IIRC they were in talks with the NFL or some other pro sports league about something this. So companies put together a pitch with current revenue streams, how to grow those, and R&D for new revenue streams, and how to do so while keeping expenses low. Those numbers are usually multiplied by some factor to determine a ballpark. Exit strategies are also considered. The goal is usually either to get acquired or go public. Marketability of a company once properly positioned, current market climate, and past exits of similar companies are also often considered. For example, Google bought YouTube for $1.65B less than two years after launch while it was still pretty rough around the edges. Gifs are already often used as lightweight, embedded video alternatives on Reddit and blogs, so it's not inconceivable that Giphy tries to make a case for being worth a similar amount if they can position themselves as a new de facto media platform for light clips like YouTube is for full videos.