Flippa revenue, CEO Blake Hutchison, team size, customer count, churn, and more in 2023.

hello everyone my guest today is blake hutchison if the name rings a belt because he jumped in full feet 2018 into running of flippa coming from a different company he's scaled companies before but now focus on helping all kinds of brands and businesses sell quickly and effectively via flip up a marketplace for again buying and selling your company blake you're ready to take to the top yeah absolutely nathan thanks for having me so let's dig into your personal story here for a second you could do anything in the world in 2018 you're working at i think you're working really this this thing that helps people book luxury experiences correct luxury rentals yeah that's right luxuryescapes.com which is a uh i guess a flash sales engine for beautiful holidays around the world and uh yeah super fun company to run so what happened i mean did the folks at football approach you and say blake you're the guy we want you in here here's where i excited come join please i mean how did that work yeah so i really like working for founders i really like running businesses on behalf of founders and had some success at luxury escapes great founding team there but as you say uh i was tapped on the shoulder so to speak so the the board and the founders at flipper had said we've got a great opportunity for you we're a global marketplace we've got customers all over the world we're helping to democratize the exit and uh that's where i've ended up and it's a lot of fun it's different to luxury holidays that's for sure so what about consider sort of exits but a different kind of exit instead of luxury goods it's it's it's digital assets and insights businesses but what did you see in the space of the time i mean again you're sitting on a great cushy thing i assume it's going well you have to have real conviction around that vision to jump out and start leading football full-time what did you see in the mma marketplace back in 2018 i think there's really uh one thing for me and then one thing that relates to the macro environment the thing for me was that i'm based here in australia flip is a technology company it's a global technology company it's bootstrapped it's profitable it's organically grown and that's a that's a rare thing to find um in the australian market of business which is truly global so that was the thing which appealed to me as it relates to the macro environment there is clearly huge amounts of growth in the small business digital sector and the small business digital sector has been one that you and i are very familiar with but the mainstream community has taken some time to jump on the back of and so with platforms like amazon and google and shopify and big commerce and recurly and any other platform that enables a digital asset owner to scale there is a fundamental paradigm shift in the opportunities for those businesses and that that struck a chord with me so let's sort of start with a very specific question and then take a step back in terms of growth of football and how it impacts sas so you help sas founders sell their company you always have interesting listings one of the top listings right now you've got editors choices swiftify.com it's a website they monetize via subscriptions they're doing 8 800 per month in net profit the multiple asking price is 450 000 for a 4.2 x sort of multiple is that the multiple you're seeing right now for sas company is that the expectation a new seller should have coming to football so the interesting thing is that it does differ by size of companies so the smaller the company the lower the multiple uh the the the larger the company the higher the multiple uh that's a very very simplistic view of the world but what we're seeing on average is a three times net profit multiple or sde multiple seller discretionary earnings on a stas asset which is between two and four years old and just people that might not be familiar with what sda means can you explain how people can calculate that yes sde seller discretionary earnings and what that relates to is uh non-carry forward costs are removed from your cost base and therefore the net profit line is adjusted and so what that means is if you've paid a um a freelance developer a large amount of money to re-platform your technology and that's a non-carry forward expense you would remove that from your p l and therefore it would impact your profit line and therefore impact profitability and ultimately uh businesses are priced against the sda versus a standard net profit so building around seller discretionary earnings should make your bottom line look better because you're removing expenses that the future buyer you know in theory would not have to incur is it accurate that's absolutely accurate how do you how do buyers get comfortable with that like how you know it's a whole combination of the buyer going well what would i actually need that expense would i have to go replace that developer with somebody else how do they get comfortable with how that sda sda is calculated yeah i think it's critically it's about is it can the buyer imagine that that expense that has been removed is no one-time expense that is non-carry forward and that's a that's a really important distinction and therefore the discussion has to happen with the current owner i see that you have removed these expenses could you tell me a little bit more about those expenses and then the buyer needs to make a judgment call as to whether those expenses should have been included in the cost base or whether it is fair and reasonable to remove those because they are non-carry forward but you're absolutely right the buyer does need to be comfortable with that and that can sometimes take some time and some digging interesting okay let's sort of get you know any marketplace business model you got to have both sides built out help us understand how effective flipa has been at that in 2018 well if you add up all of the sale prices of all the websites you sold how much total gmv went through the platform in 2018 so we so we uh well each each month is a little bit different each each year is a little bit different we didn't we do around uh well i'm not going to reveal what we do gmv wise but we um we see around four and a half thousand listings a month on the platform across the collection of digital assets and those digital assets are sas businesses as if you as you've alluded to so well nathan and i know your community is very passionate about but they can also include e-commerce content assets marketplace assets and apps so if you're not comfortable talking about gmv is there a different number you can point to that highlights football's ability to move inventory so that these 4500 listings don't just sit there yeah absolutely so so we converted 35 so 35 of all assets list on flipper uh sell on flipper and the important thing about that is that remember how many assets we list each month so this has nothing to do we're not a broker that's a really important distinction flipper is a marketplace it's a peer-to-peer environment where high quality digital uh real estate owners so sas founders for instance can uh find a pathway to the largest network of buyers globally so we have over three million users in fact it was two weeks ago that flipper signed up its 3 millionth user so that should give you some sense of the scale that we operate and when you say user you mean a seller looking to sell or a buyer looking to buy actually the combination of both buyers and sellers combined is a combined community of 3 million people okay got it so how many how do you measure sort of an active buyer on the platform because as you and i have discussed i mean the best way to move an asset is to get a bidding war going which is measured by when you list it on flippa how many people do you push it out to and how many buyers actually place a bid to create that bidding war yeah it's a great question so um i'll answer it um at a very high level first so we have 1.5 million active buyer accounts so those are buyers looking at the platform and they have looked at the platform and considered a listing within the prior six month period okay so that so that's that's the first piece the second piece though is remember that buyers have varying budgets and so you can have a buyer who's looking to acquire a small template so that they can start their first online business and they might have a thousand dollar budget and then we've got private equity vc high net worth uh and big budget buyers operating up to sort of the 10 million dollar mark or at least that's the that's the budget that they are sitting on the platform that's not 1.5 million users it's far less than that but it's uh it's a it's a large number we have sort of 50 60 000 buyers operating it what we would call high value range now the way a marketplace works which is fundamentally different to um delivery just to quantify that when you say high value range does that mean you've said okay we know they have at least a million to spend or like is there some yeah high value is defined as 750 plus 750 000 plus how do you know they have that available to spend on m a though uh they set preferences on the platform and uh we haven't gone and there's no credit check of that buyer we haven't looked at their personal bank account um but they have set preferences accordingly and then that informs our matching algorithm so we see somebody lists on flipper our marketplace dynamics take over and we ensure that any given asset as long as that asset is reasonably priced which you and i can perhaps get into and as long as that asset has the requisite detail on the listing we let our matching algorithm play out and then...