Under Armour
A sportswear company that once owned MyFitnessPal.
- Paid $475M
- Growth still strong
- Priced on future run rate
- Over $100M less
- Growth had slowed
- Priced on last 12 months
Slower growth meant a lower price for the same app
From Under Armour page, MyFitnessPal deal
What was said about Under Armour
Under Armour paid $475M for MyFitnessPal while it was still growing. Under Armour bought MyFitnessPal in 2015 for $475M, when the app's growth was still strong. In 2020 it sold the app to Francisco Partners for over $100M less, after growth had slowed.
The gap between the two prices is used as evidence that buyers pay for future run rate on fast-growing apps and for the last 12 months on slower ones. Fast-growing, profitable apps (30 to 50% EBITDA margin) can be valued at up to 6x on future run rate.
Sell before your growth slows, and before you need to. Sell the growth story while growth continues, and let the buyer pay for the peak that is still ahead rather than trying to time your own peak. Go to the table with other options so you are not forced to sell.
Quote: "Sell before you need to."
$172M of App Building Advice in 50 Minutes
It paid $475M for MyFitnessPal in 2015, when the app was still growing.
Under Armour paid $475M for MyFitnessPal while it was still growing. Under Armour bought MyFitnessPal in 2015 for $475M, when the app's growth was still strong. In 2020 it sold the app to Francisco Partners for over $100M less, after growth had slowed.
The gap between the two prices is used as evidence that buyers pay for future run rate on fast-growing apps and for the last 12 months on slower ones. Fast-growing, profitable apps (30 to 50% EBITDA margin) can be valued at up to 6x on future run rate.
Sell before your growth slows, and before you need to. Sell the growth story while growth continues, and let the buyer pay for the peak that is still ahead rather than trying to time your own peak. Go to the table with other options so you are not forced to sell.
Quote: "Sell before you need to."
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