Why HoneyBook’s $140M in ARR could lastly justify its $2.4B ZIRP-era valuation

HoneyBook, a startup final valued in late 2021 at $2.4 billion, informed TechCrunch that it hit $140 million annualized recurring income (ARR).

This makes HoneyBook one of many few startups with peak-VC-era valuations to report their financials after the market cooled. 

Many startups that raised in 2021 and never since stay underneath strain to generate the income wanted to validate their beforehand inflated valuations, and many not survive much longer.

However HoneyBook is doing so nicely, it sees no cause to nonetheless preserve its income metrics secret, says HoneyBook CEO and co-founder, Oz Alon.

HoneyBook presents enterprise administration software program for impartial service-based entrepreneurs resembling photographers, occasion planners, and inside designers. Its final raise was a $155 million Series E from Tiger World Administration about three and a half years in the past.

On condition that HoneyBook remains to be valued at $2.4 billion, the newest ARR determine implies a valuation a number of of about 17 instances ARR.

Whereas there are not any hard-and-fast guidelines for valuing personal corporations, buyers say that late-stage pre-AI period software program corporations are typically priced not an excessive amount of otherwise from their public market comparables. Meritech SaaS Index reveals that corporations rising at 25% or more a year are actually priced at a median of 13 instances their ARR.

So what may probably justify the marginally higher-than-average a number of for HoneyBook? One phrase: AI. This week, the corporate launched new AI performance that helps customers determine tips on how to worth providers and serve their clients higher.  

The corporate claims it’s uniquely positioned to assist entrepreneurs make enterprise choices with AI as a result of it has knowledge on how comparable small enterprise house owners worth their providers and develop their consumer lists.

HoneBook’s AI is embedded into its present providing that features a CRM, handles billing, funds, and offers eligible customers entry to the funds for enterprise development.

Jeff Crowe, senior managing associate at Norwest and a HoneyBook investor, believes the corporate can turbo-charge its enterprise with AI.

“Solopreneurs, like photographers, don’t have the time or the enterprise savvy” to assume strategically about tips on how to develop their enterprise, Crowe mentioned. 

The hope is that the brand new performance will assist HoneyBook’s present customers develop their very own companies, and in consequence, the startup will make more cash from the bigger quantity of transactions it processes.