This morning, accounting software company Intuit bought Demandforce for $423.5 million in cash.
Intuit is best known for its small business accounting and personal finance software like Quickbooks and Quicken, but it's branched out into a wide variety of other products for businesses. It even has a Square competitor called GoPayment.
Its last big acquisition was personal finance advisory service Mint, which cost $170 million.
Demandforce makes software for small businesses to handle customer service and contact.
Demandforce had sales of $37.5 million last year, reports Bloomberg, and reporter Doug Macmillan tweeted that the company is now making about $60 million per year, run rate.
So Intuit paid only about 7x current revenues for the company.
In an environment where Facebook pays $1 billion (including cash and stock) for Instagram, a company with zero revenue, that looks like a bargain.
Of course, there are a lot of other considerations -- Demandforce may not be growing anywhere near as fast as Instagram was, and Mark Zuckerberg was paranoid about Facebook losing its edge among teens.
But an 7x-revenues valuation is eminently reasonable.
This also matches what we've been hearing from nearly every VC and finance person we talk to: relatively speaking, B2B and enterprise startups are undervalued compared with consumer startups.
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