Intuit Buys B2B Startup For Only 7x Revenues

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.



More From Business Insider
Loading...
 
Recent Quotes
Symbol Price Change % Chg 
Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
You need to enable your browser cookies to view your most recent quotes.
 
Sign-in to view quotes in your portfolios.

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    1.3678-0.0032-0.24%
    USDSGD=X
    1.4932+0.0024+0.16%
    EURSGD=X
    2.0373+0.0019+0.09%
    GBPSGD=X
    87.1236+0.1506+0.17%
    SGDJPY=X
    5.6697+0.0137+0.24%
    SGDHKD=X
    2.6862+0.0113+0.42%
    SGDMYR=X
    9,551.6826+49.4922+0.52%
    SGDIDR=X
    4.5448+0.015+0.33%
    SGDCNY=X
    1.0621-0.0107-0.99%
    AUDSGD=X
  • Commodities
    Commodities
    NamePriceChange% Chg
    1,198.90-5.90-0.49%
    GCJ15.CMX
    17.06-0.08-0.47%
    SIK15.CMX
    67.91-0.48-0.70%
    ^XAU
    2.77-0.04-1.57%
    HGK15.CMX
    50.06-1.37-2.66%
    CLK15.NYM
  • Bonds
    Bonds
    TreasuryYield (%)Yield Change
    1.42-0.05
    ^FVX
    1.96-0.05
    ^TNX
    2.54-0.06
    ^TYX

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    0.435+0.030+7.41%
    E5H.SI
    0.131+0.015+12.93%
    E13.SI
    0.167+0.004+2.45%
    5GB.SI
    0.285-0.005-1.72%
    5WA.SI
    0.945+0.015+1.61%
    N21.SI
  • % Gainers
    % Gainers
    NamePriceChange% Chg
    0.31+0.08+34.78%
    5PD.SI
    0.131+0.015+12.93%
    E13.SI
    0.255+0.025+10.87%
    D79.SI
    0.39+0.03+9.86%
    D03.SI
    0.435+0.030+7.41%
    E5H.SI
  • % Losers
    % Losers
    NamePriceChange% Chg
    0.135-0.007-4.93%
    K14.SI
    1.862-0.095-4.85%
    O9D.SI
    0.515-0.025-4.63%
    R07.SI
    0.22-0.01-4.35%
    M14.SI
    0.225-0.010-4.26%
    DU4.SI