It is impossible to predict revenue, or valuations. But for purely illustrative purposes, we’ve described a base case, a bear case, and bull case below.
Base case: Assuming the current business model and simply applying a decay on their growth rate (→ 50% in 2024 → 40% in 2025 → 35% in 2026), the company would reach $600M → $850M → $1.15B in revenue. With gross margins staying stable at ~50%, here is the implied valuation of a back of the envelope DCF analysis
Bear case: Assuming growth dramatically drops off or stagnates, a hypothetical scenario might look like → 30% in 2024 → 20% in 2025 → 10% in 2026. In that scenario, the company would reach $500M → $600M → $660M in revenue. If gross margins decay due to higher interest rate costs and/or competition and decreasing pricing power, to → 48% → 45% → 42%, here is the implied valuation of a back of the envelope DCF analysis.
Bull case: If growth accelerates due to additional business lines, or any improvements to their unit economics because of lower borrowing costs (with potential rate decreases), and addition of subscription revenue products (e.g., vendor management).
Then let’s say that revenue growth looks like 60% in 2024, 55% in 2025, and 50% in 2026, and gross margins slightly improving to → 52% → 55% → 60%. In that scenario, the company would reach $610M → $950M → $1.42B in revenue, and an implied valuation based on back of the envelope DCF of: