Hear us out, though: Why wasn’t the deal more expensive?
Alex Wilhelm
9 hours
Rocket Companies announced this morning that it will purchase Truebill for $1.275 billion in cash.
Rocket Companies is best known for its Rocket Mortgage product, while Truebill is a consumer-facing app that helps consumers manage subscriptions, automate savings and budget. The deal’s price tag will prove lucrative for Truebill shareholders. PitchBook data indicates that Truebill’s final private valuation was $530 million after its last round was counted. That $45 million investment took place earlier this year.
So, a quick more-than-double for Truebill’s final investors, and an even bigger return for its earlier backers. Not bad, right?
Let’s play Guess! That! Multiple!
Given that Truebill is selling for a hair under $1.3 billion, you have the information you need to come up with an estimate for the startup’s annual recurring revenue (ARR). In broad terms, where do you think the company’s top line will land at the end of the year?
If you guessed something around $50 million, our heads are in the same spot. Tech valuations are high despite some recent declines, and fintech is hot. So, a multiple in the mid-20s felt like a good guess.
Wrong. Here’s Rocket (emphasis added):
This new line of business will also add consistent monthly revenue for Rocket Companies. Today, monthly payments made by clients to the company’s mortgage servicing operations generate $1.3 billion in …
