

Discover more from Cobalt Consumer Insights
Cobalt Consumer Index (7.26.22)
The following contains our view on the market and the interesting dynamics that inform our investing in consumer technology businesses
Consumer spend is continuing to decrease. According to this Bloomberg article, 84% of those in the U.S are looking to cut back spending amidst the steepest inflation in 40+ years. Discretionary spend is shifting towards staples due to this trend. In a difficult memo written by Shopify CEO, Tobi Lutke today on company-wide layoffs, he alludes to U.S ecommerce adoption growth rate stifling from the pull-forward acceleration of COVID.
“We bet that the channel mix - the share of dollars that travel through ecommerce rather than physical retail - would permanently leap ahead by 5 or even 10 years. It’s now clear that bet didn’t pay off. What we see now is the mix reverting to roughly where pre-Covid data would have suggested it should be at this point. Still growing steadily, but it wasn’t a meaningful 5-year leap ahead.”
Back to regularly scheduled programming…
Top 10 Companies by EV / NTM Revenue Multiple
Etsy has entered the Top 10 while Tencent has exited. Auto Trader continues to be the only consumer company trading above 10x on forward multiple. Mean and Median are relatively flat from the last report
Summary of All Multiples
Mean and Median have stayed relatively flat
We value consumer businesses on a multiple of Last Twelve Months (LTM) and Next Twelve Months (NTM) revenue. Multiples shown are calculated by taking the Enterprise Value / NTM revenue. In addition, we separated multiples by time period and by growth rate. High growth businesses are growing 40% NTM revenue; Mid-growth businesses are growing 20% NTM revenue, and Low-growth are less than 20% growth rate.
Breakdown of Historic Multiples
Multiples by Category
We have separated the multiples and outputs by subsector. On the upper end, consumer social commands the highest EV/NTM multiples, while e-commerce commands the lowest multiples.
Multiples by Growth Category
Subsector Output
Please send any feedback or suggestions to insights@cobalt.la.
Written by Ben Futoriansky.
Certain information contained in here has been obtained from third-party sources and Cobalt has not independently verified such information and we make no representations about the accuracy of the information contained in this blog, links to third party sources or the materials provided by such sources. The content in this blog is for informational purposes only and should not be relied upon as investment advice or recommendations of any kind. In addition, nothing contained in this blog should be relied upon for purposes of investing in any funds managed by Cobalt Capital, nor is anything contained herein an offering to invest in any Cobalt Capital fund — any such offering will be set forth in a legal agreement provided directly by Cobalt Capital.
The content in this blog speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.