Quartermast Advisors

Voodoo acquired BeReal for €500M. How does this compare to other social media acquisitions? It's a drop in the bucket relative to other platform deals: Google $1.65B acquisition of YouTube (2006) Facebook's $1B acquisition of Instagram (2012) Yahoo's $1.3B acquisition of Tumblr (2013) Amazon's $970M acquisition of Twitch (2014) Facebook's $19B acquisition of WhatsApp (2014) Microsoft's $26.2B acquisition of LinkedIn (2016) Elon's $44B takeover of Twitter (2022) How should we think about BeReal's valuation? 🤔 Despite being 4 years old, the company is still pre-revenue, so we can't rely on traditional revenue and EBITDA multiples. But we can look at usage comps. Voodoo claims BeReal has 40M monthly active users (MAU), half of whom use the app at least 6 days a week. They paid EUR €500M, or roughly USD $537M, for BeReal, which works out to $13.43 per user. And how does that compare to other social platforms? Let's look at Enterprise Value (EV) divided by Monthly Active Users (MAU) for publicly traded social companies: Instagram: $567.6B EV / 2B+ MAU = $283.80 per user Facebook: $678.9B EV / 3B+ MAU = $226.30 per user Pinterest: $29.9B EV / 500M+ MAU = $59.80 per user Snapchat: $25.6B EV / 800M+ MAU = $32.00 per user Reddit: $10.1B EV / 850M MAU = $11.84 per user But keep in mind that all of these companies already generate revenue, to the tune of hundreds of millions to billions each year! BeReal has yet to make a dime. That didn't matter to BeReal's investors though. The company raised a total of $89.7M over 3 rounds: Seed: $1.8M at a $7.8M pre-money valuation (May 2021) Series A: $28.5M at a $95.1M pre-money valuation (Jun 2021) Series B: $59.4M at a $526.5M pre-money valuation (Apr 2022) As a result, we estimate BeReal's Seed investors earned a nice 38.8x return, compared to only 3.9x for Series A and 1.0x return for Series B investors (assuming a 1.0x liquidation preference). It certainly pays to get in early! What's your take on the acquisition?

This feels like News Corp buying Myspace, if it were 3 years too late. BeReal burst onto the scene in 2020, exciting a new generation of social media users with its spontaneous prompts and unfiltered posts from friends. It got a lot of things right, including... ✅ Pioneering the dual camera format, allowing users to share what they were doing and their reactions. ✅ Building a globally recognizable brand, which similar apps like Dispo and Poparazzi never managed. ✅ Capitalizing on Gen Z's interest in more raw, authentic social content. ✅ Creating virality and growing an engaged user base. But it also faced a number of challenges... ❌ BeReal was a feature, not a product. The company failed to innovate beyond its dual camera format, which was easily copied by competitors, like TikTok Now and Instagram's Candid Challenges. ❌ BeReal never developed a monetization strategy, which would give it a path to sustainable growth and longevity. ❌ It didn't embrace creators and brands. BeReal fashioned itself as more of a messaging platform (a la Snap) or traditional social network, both of which are viable business plans, but the most successful social apps have evolved to become content platforms for creators and brands. ❌ It should have leaned into its "anti-Instagram" reputation and built the premier social platform for Gen Z and Gen Alpha. So why would a French mobile apps and games publisher acquire BeReal? 𝐈𝐭 𝐛𝐞𝐥𝐢𝐞𝐯𝐞𝐬 𝐢𝐭 𝐜𝐚𝐧 𝐫𝐞𝐢𝐧𝐯𝐢𝐠𝐨𝐫𝐚𝐭𝐞 𝐩𝐫𝐨𝐝𝐮𝐜𝐭 𝐝𝐞𝐯𝐞𝐥𝐨𝐩𝐦𝐞𝐧𝐭 𝐚𝐧𝐝 𝐮𝐬𝐞𝐫 𝐠𝐫𝐨𝐰𝐭𝐡. 🛠️ BeReal was a breakout success during the pandemic, but it peaked in 2022 as innovation and usage stalled. Perhaps Voodoo can turn it around. 𝐅𝐫𝐞𝐧𝐜𝐡 𝐩𝐫𝐢𝐝𝐞. 🇫🇷 BeReal is the most successful social platform to come out of Europe since VK. In a world dominated by US and Chinese social media giants, it was exciting to see an innovative social startup being built in France. Voodoo has a chance to continue that mission. 𝐕𝐨𝐨𝐝𝐨𝐨 𝐰𝐚𝐧𝐭𝐬 𝐭𝐨 𝐜𝐨𝐦𝐩𝐞𝐭𝐞 𝐰𝐢𝐭𝐡 𝐆𝐨𝐨𝐠𝐥𝐞 𝐚𝐧𝐝 𝐌𝐞𝐭𝐚. 🤼 The French tech company touts the fact that it's the #3 mobile publisher in terms of downloads after Google and Meta, so perhaps it wants a chance to compete with them in social as well. And who knows? With Google and Meta facing greater antitrust scrutiny, especially in the EU, there could be an opportunity for new social platforms to cater to European consumers. 𝐖𝐡𝐚𝐭'𝐬 𝐲𝐨𝐮𝐫 𝐭𝐚𝐤𝐞 𝐨𝐧 𝐭𝐡𝐞 𝐁𝐞𝐑𝐞𝐚𝐥 𝐚𝐜𝐪𝐮𝐢𝐬𝐢𝐭𝐢𝐨𝐧? 𝐂𝐮𝐫𝐢𝐨𝐮𝐬 𝐭𝐨 𝐡𝐞𝐚𝐫 𝐲𝐨𝐮𝐫 𝐭𝐡𝐨𝐮𝐠𝐡𝐭𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐜𝐨𝐦𝐦𝐞𝐧𝐭𝐬. Want to know more about the transaction itself? Stay tuned for my deal analysis tomorrow morning! https://lnkd.in/gD4Gr5Ws