5 ms·

This acquisition seems to make a lot of sense. Product Hunt is awesome, but it definitely doesn't feel like it's been able to monetize in any meaningful way. Th

by jscheel 10y ago

This acquisition seems to make a lot of sense. Product Hunt is awesome, but it definitely doesn't feel like it's been able to monetize in any meaningful way. The question, of course, is how will Angellist get their $20 mil back?

traviswingo 10y ago
Do we know the acquisition price?
- ricardonunez 10y ago
  "The acquisition price was around $20 million, according to numerous sources familiar with the terms." http://www.recode.net/2016/12/1/13802154/angellist-product-hunt-acquisition http://www.recode.net/2016/12/1/13802154/angellist-product-h...
  - apadmarao 10y ago
    Can someone explain why this is a reasonable ballpark price? The site is successful, and provides real value to the apps being hunted and the users that discover the apps - but the acquisition price is in acquihire territory.
    - AznHisoka 10y ago
      I thought $20 million was way too high.
    - wwalser 10y ago
      The price is going to be some multiple on their revenue, I'd guess somewhere in the 4-6x range. $20MM is enough to get investors ($7MM invested) off your back and let the acquisition go forward and there is plenty of opportunity for back-end deals where key players have an earn out not represented by the acquisition price.
      - AznHisoka 10y ago
        How do they make revenue currently? I don't see any ads, and I don't even see anywhere I can promote my product for a fee. I'll go out on a limb and suggest it's 40-60X revenue, and even that may be too low (anyone from ProductHunt reading, please correct me, but I doubt it).
        wwalser 10y ago
        You could be correct but I'd assume they are making reasonable money on referral programs and direct sales. I know for a fact that direct sales are a thing (or were at one point)[0]. Basically the "get it" button becomes a checkout for for some products instead of a link to the site. Taking advantage of referral programs also seems like an obvious thing that they _should_ be using. Especially for companies which want a product hunted and already have a referral program in place. 0. https://techcrunch.com/2016/05/19/product-hunt-is-ready-to-rake-in-revenue-by-selling-goods-directly-on-the-platform/ https://techcrunch.com/2016/05/19/product-hunt-is-ready-to-r...
      - exogeny 10y ago
        It's absurd that you think PH was doing anywhere close to that revenue. The sale price to me is baffling, even if it was stock. You're not buying revenue, you're not buying valuable technology IP, and you're sure as hell not buying a world-class team that innovated and built some rocketship product. So how do you explain it? Maybe the fact that it was bought by one of their investors is a start..
        wwalser 10y ago
        Is it crazy to think that a website with 2.8MM uniques/month could make could make $280,000/month? I honestly don't know the numbers for a media companies, referral programs or direct resellers. There's also some obvious alignment between the two companies so maybe it was a much larger multiple than I would have expected. The team absolutely managed to build a product that has captured the attention (in many cases daily attention) of the type of people that AngelList wants.
    - Mahn 10y ago
      The site was successful, but it doesn't look like it had a whole lot of potential for growth; more likely than not it already peaked and was losing steam due to an ever decreasing quality in submissions.
    - Naritai 10y ago
      Exactly - the fact that the price is in acquihire territory is the real news. Playing it up as a 'success' is nothing more than marketing spin. The issue is, both AngelList and PH have a vested interest in letting people think that they made a great deal, so if sites like TC are going to talk it up as a 'genius move', they're certainly not going to say otherwise.
    - k-mcgrady 10y ago
      >> "The site is successful" In what way? It has taken investment so it needs to eventually make money. How is going to monetise? Also, there is a limited audience for it so it's growth potential isn't great. Even as someone involved in tech and interested in startups I don't get much use out of it as most of the products aren't interesting or useful.
    - oliv__ 10y ago
      So much for a16z "genius" investors...
  - AndrewKemendo 10y ago
    Interesting because according to crunchbase their $6M round with a16z was at a $22M Val. With a follow on debt financing, that indicates to me that they might have taken a down acquisition. Of course that was 2+ years ago. So if it was a 20M acquisition that means that the last two years of growth [2] wasn't good enough. [1] https://www.crunchbase.com/organization/product-hunt#/entity https://www.crunchbase.com/organization/product-hunt#/entity [2] https://www.google.com/trends/explore?q=product%20hunt https://www.google.com/trends/explore?q=product%20hunt
    - skinnymuch 10y ago
      I guess because there wasn't too much growth for two years now? More or less stable after the main explosion of growth in early 2014. Interesting to see the trend chart. At least PH kept their numbers over the past two years.
- dwightgunning 10y ago
  They'd raised ~$7.5M over three rounds according to crunchbase[1]. 1: https://www.crunchbase.com/organization/product-hunt#/entity https://www.crunchbase.com/organization/product-hunt#/entity
- deleted 10y ago
  [deleted]
chang2301 10y ago
AL users might have a more meaningful way in the future to invest in hot PH products.
greenspot 10y ago
> Product Hunt is awesome Please explain why. I tried to use Product Hunt as a daily driver for product and startup discovery several times but I could never stick with it, found it quite boring. There is so much media out there telling me about new products or startups every day, for what do I need Product Hunt?
rokhayakebe 10y ago
I have no idea how stock-based acquisitions work, but I think you can do something like We are worth 200M, you are worth 20M, we issue new stocks worth 20M, we buy you for those 20M, now we are worth 220M. It costs us legal fees.
oelmekki 10y ago
Actually, I think it makes a lot of sense from a revenue point of view, for AngelList. Their product allows for investors and startups to meet. But where do those startups come from? What is the reception for their product? Are early users excited about it? Integrating PH to AL could give strong signal to investors, which is especially a big win for investors from syndicates, who may not be as active in their research than bigger investors. Signal processing from PH launches can be automated and give intel to AL investors. PH can be here basically to feed startups for AL users to invest in. I think an other great addition here would be Betalist. Startups on PH are probably already past seed funding, Betalist would allow AngelList to have a good stream of seeding stage startups, which would allow AL to become a startup pipeline.
- seoseokho 10y ago
  I think Betalist will be next as well. But I'd think AL/PH would try their own BetaList like section.

by jscheel 10y ago

traviswingo 10y ago

Do we know the acquisition price?

ricardonunez 10y ago
"The acquisition price was around $20 million, according to numerous sources familiar with the terms." http://www.recode.net/2016/12/1/13802154/angellist-product-hunt-acquisition http://www.recode.net/2016/12/1/13802154/angellist-product-h...
- apadmarao 10y ago
  Can someone explain why this is a reasonable ballpark price? The site is successful, and provides real value to the apps being hunted and the users that discover the apps - but the acquisition price is in acquihire territory.
  - AznHisoka 10y ago
    I thought $20 million was way too high.
  - wwalser 10y ago
    The price is going to be some multiple on their revenue, I'd guess somewhere in the 4-6x range. $20MM is enough to get investors ($7MM invested) off your back and let the acquisition go forward and there is plenty of opportunity for back-end deals where key players have an earn out not represented by the acquisition price.
    - AznHisoka 10y ago
      How do they make revenue currently? I don't see any ads, and I don't even see anywhere I can promote my product for a fee. I'll go out on a limb and suggest it's 40-60X revenue, and even that may be too low (anyone from ProductHunt reading, please correct me, but I doubt it).
      - wwalser 10y ago
        You could be correct but I'd assume they are making reasonable money on referral programs and direct sales. I know for a fact that direct sales are a thing (or were at one point)[0]. Basically the "get it" button becomes a checkout for for some products instead of a link to the site. Taking advantage of referral programs also seems like an obvious thing that they _should_ be using. Especially for companies which want a product hunted and already have a referral program in place. 0. https://techcrunch.com/2016/05/19/product-hunt-is-ready-to-rake-in-revenue-by-selling-goods-directly-on-the-platform/ https://techcrunch.com/2016/05/19/product-hunt-is-ready-to-r...
    - exogeny 10y ago
      It's absurd that you think PH was doing anywhere close to that revenue. The sale price to me is baffling, even if it was stock. You're not buying revenue, you're not buying valuable technology IP, and you're sure as hell not buying a world-class team that innovated and built some rocketship product. So how do you explain it? Maybe the fact that it was bought by one of their investors is a start..
      - wwalser 10y ago
        Is it crazy to think that a website with 2.8MM uniques/month could make could make $280,000/month? I honestly don't know the numbers for a media companies, referral programs or direct resellers. There's also some obvious alignment between the two companies so maybe it was a much larger multiple than I would have expected. The team absolutely managed to build a product that has captured the attention (in many cases daily attention) of the type of people that AngelList wants.
  - Mahn 10y ago
    The site was successful, but it doesn't look like it had a whole lot of potential for growth; more likely than not it already peaked and was losing steam due to an ever decreasing quality in submissions.
  - Naritai 10y ago
    Exactly - the fact that the price is in acquihire territory is the real news. Playing it up as a 'success' is nothing more than marketing spin. The issue is, both AngelList and PH have a vested interest in letting people think that they made a great deal, so if sites like TC are going to talk it up as a 'genius move', they're certainly not going to say otherwise.
  - k-mcgrady 10y ago
    >> "The site is successful" In what way? It has taken investment so it needs to eventually make money. How is going to monetise? Also, there is a limited audience for it so it's growth potential isn't great. Even as someone involved in tech and interested in startups I don't get much use out of it as most of the products aren't interesting or useful.
  - oliv__ 10y ago
    So much for a16z "genius" investors...
- AndrewKemendo 10y ago
  Interesting because according to crunchbase their $6M round with a16z was at a $22M Val. With a follow on debt financing, that indicates to me that they might have taken a down acquisition. Of course that was 2+ years ago. So if it was a 20M acquisition that means that the last two years of growth [2] wasn't good enough. [1] https://www.crunchbase.com/organization/product-hunt#/entity https://www.crunchbase.com/organization/product-hunt#/entity [2] https://www.google.com/trends/explore?q=product%20hunt https://www.google.com/trends/explore?q=product%20hunt
  - skinnymuch 10y ago
    I guess because there wasn't too much growth for two years now? More or less stable after the main explosion of growth in early 2014. Interesting to see the trend chart. At least PH kept their numbers over the past two years.
dwightgunning 10y ago
They'd raised ~$7.5M over three rounds according to crunchbase[1]. 1: https://www.crunchbase.com/organization/product-hunt#/entity https://www.crunchbase.com/organization/product-hunt#/entity
deleted 10y ago
[deleted]

chang2301 10y ago

AL users might have a more meaningful way in the future to invest in hot PH products.

greenspot 10y ago

> Product Hunt is awesome Please explain why. I tried to use Product Hunt as a daily driver for product and startup discovery several times but I could never stick with it, found it quite boring. There is so much media out there telling me about new products or startups every day, for what do I need Product Hunt?

rokhayakebe 10y ago

I have no idea how stock-based acquisitions work, but I think you can do something like We are worth 200M, you are worth 20M, we issue new stocks worth 20M, we buy you for those 20M, now we are worth 220M. It costs us legal fees.

oelmekki 10y ago

Actually, I think it makes a lot of sense from a revenue point of view, for AngelList. Their product allows for investors and startups to meet. But where do those startups come from? What is the reception for their product? Are early users excited about it? Integrating PH to AL could give strong signal to investors, which is especially a big win for investors from syndicates, who may not be as active in their research than bigger investors. Signal processing from PH launches can be automated and give intel to AL investors. PH can be here basically to feed startups for AL users to invest in. I think an other great addition here would be Betalist. Startups on PH are probably already past seed funding, Betalist would allow AngelList to have a good stream of seeding stage startups, which would allow AL to become a startup pipeline.

seoseokho 10y ago
I think Betalist will be next as well. But I'd think AL/PH would try their own BetaList like section.