4 ms·
$100m revenue is impressive. But what are the gross margins on that?
by bbcbasic 12y ago
$100m revenue is impressive. But what are the gross margins on that?
- brandoncarl 12y agoObviously hard to tell, but you can extrapolate a bit. At $100mm in revenue, and an assumed $60 order price, you've got 1.6mm orders. Assuming 25% of people pay for faster delivery, you've got gross revenue per order of $4.50, or gross revenue of $7.2mm. If Instavart takes a 30% share (similar-ish to Uber and iTunes), you're looking at $2.2mmin revenue after paying contractors. So that would leave you with 2.2% of sales as your margin after contractors. This obviously changes if they mark up the groceries or if the assertions are different. Out of interest, a 15 P/E on 2bb would correspond to a 60x grow in their market (ish). They currently represent about 100mm of Whole Foods 15bb take, or about 0.67%. A 60x increase would take them to managing 40% of Whole Foods orders, given no expansion into other grocery chains. This is a lot of hand-waving, so please take it with a grain of salt.
- steven2012 12y agoThey must be including the cost of the groceries in as revenue. However, there's a good question as to whether or not they are allowed to include this as revenue or not, similar to Groupon. Revenue recognition is going to be a tricky one for them, since they are clearly distinguishing themselves as the delivery agent for stores like Whole Foods, Safeway, etc. This, and the question of whether or not their workers are actually contractors or employees are the two biggest issues that I would be curious about. If history has any bearing, I think Instacart, Uber, etc will face the same outcome that Microsoft did with their "contract" workers, ie. they will be deemed employees and will have to pay up.