Zynga Raising $500 Million at $10 Billion Valuation

Re:Zynga Raising $500 Million at $10 Billion Valuation by vessenes on Friday February 18, 2011 @02:16AM (#2234596)

10X Revenue is roughly the market price for SAAS model companies. The general perspective is that Gross Margin is frequently in excess of 80%; in that world, you can spend marketing and sales dollars with abandon and still make money.

By the way, this is roughly how SalesForce is valued -- they turn a very small profit (100 or so P/E), and roughly an 8 to 10x P/R. I think of those prices as 'sold on the growth vision' but not egregious.

[ Parent | on HN ]

Re:Zynga Raising $500 Million at $10 Billion Valuation by r00fus on Friday February 18, 2011 @02:45AM (#2234656)

So Zynga have $1B revenue/yr by your metric? I somehow doubt they're that high... so hence the more unrealistic multiple based on other unreal valuations (ie, comps).

[ Parent | on HN ]

Re:Zynga Raising $500 Million at $10 Billion Valuation by adamt on Friday February 18, 2011 @03:04AM (#2234695)

Venturebeat claims Zynga'a 2010 revenues were $850m (http://venturebeat.com/2011/02/17/zynga-funding-10-billion). Just shy if a billion but given growth quite conceivable that they did more than $250m in last quarter ($1B annualised)

Interesting to compare and contrast market cap versus EA and Activison.

[ Parent | on HN ]