EV/EBIT multiple for digital e-commerce businesses

by a searcher from The Interdisciplinary Center Herzliya

3 years ago

Dear all

Any ideas of EV/EBIT multiple to evaluate digital products e-commerce business like this one... 

We are a self-funded search, currently in the process of signing the LOI and willing to get some validation to our proposal and mainly to the EV/EBIT multiple. The Company details are below:
Industry: Online test & assessment preparation (e-commerce)
Product: An online kit (like GMAT)
Financials 2020: 
Revenue: USD10m (growing 10-15% for the last years). 
EBIT: USD3m (growing 10-15% for the last years)

Business dynamics:
B2C
Non-recurring revenues
Cash conversion: >90%
Competitive landscape
Low entry barriers
Any ideas for relevant sources to evaluate digital e-commerce businesses?

If interested, please reach out directly to --@----.com 
Best and happy weekend,
Matan

6 likes
174 views
15 comments

searcher from Duke University - The Fuqua School of Business

i would also consider how differentiated the brand is, Own manufacturing vs, outsourced. Superior product ingredients vs. commodity product

1 year ago | like reply | 0 likes

searcher from Simon Fraser University

LTV:CAC is the biggest value driver for an eCommerce business.

How are customers being acquired & how sustainable is that channel? For example, a company overly reliant on organic search to acquire new customers is quite risky given how easy it is to implode that channel.

Happy to talk more offline if you'd like. We specialize in buying eCommerce/DTC brands and have a consulting practice. Just DM me!

3 years ago | like reply | 2 likes

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