Real Estate Valuation Multiples

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Valuation Multiples: Rows 7 and 8

Trulia was acquired by Zillow in 2015 for a total price of roughly $2 billion and generates an annual revenue of $251.94 million. We then can calculate the valuation multiple for Trulia at 7.94. Unfortunately, we were unable to determine the valuation of Trelora, however, the estimated annual revenue is $960,000. Below we have provided a deep dive into our findings which can also be found in the attached spreadsheet as well as our research strategy.

Methodology

After an exhaustive search, we were unable to determine the valuation of Trelora because it is a private company. While we were able to find the average EBITDA multiples for real estate (general/diversified): (19.90), real estate (operations and services): (11.75), and computer services: (10.74), we were not comfortable using these for potential triangulation as they are vastly different from Zillow and Redfin, and there is little data on which to project a response.
Because this company is private, there are no financial reports available to the public. Investment raised and annual revenue, however, was easily found on standard business financial websites. We searched CrunchBase and confirmed accuracy with both Hoovers and Pitchbook. Company valuation was not available on any of the websites mentioned above. This is not surprising, as the company is privately owned and in a competitive marketplace. Because of this we attempted to calculate a company valuation for that field in the spreadsheet. While we realize valuation is a subjective process, we were hoping to be able to come up with a reasonable number using a standard valuation model like the ones below.
We started with the website Mars Network, which is a resource for entrepreneurs. Their valuation model formulas require three numbers but only one number, amount invested, was publicly available, so we could not use this model. We then attempted to use the valuation model of Cayenne Consulting. However, they calculate by asking 25 different questions, some subjective and some requiring data that was not publicly available. Therefore, we could not use this model. We next attempted to use the five-step model to determine company valuation as published in a Houston small business magazine, however, due to insufficient publicly available information for the company we were unable to proceed. We next attempted to use the three business valuation methods of The Balance, which are the Asset Based Approach, Earning Based Approach, and Market Based Approach, but found that we had insufficient figures to complete these approaches.
After finding six different models for calculating the valuation of a company, and determining that we do not have the information required for any of them, we completed the fields in the spreadsheet as N/A.

Findings

Trulia received a total of $255.1 million in funding from 5 rounds: Series A with $2.1 million; Series B with $5.7 million; Series C with $10 million; Series D with $15 million; and Post-IPO Debt with $222.3 million. We calculated the valuation for the company by analyzing the most recent annual report for Zillow, which acquired the company in 2015. According to the report, Zillow purchased the company for roughly $2 billion based on allocated assets amounting to $1.966 billion at the time of the acquisition. The public estimated revenue for Trulia is $251.91 million annually creating a valuation multiple of 7.94.

Trelora is a private company and does not have any public data regarding valuation or available metrics to calculate the value. According to public record, the company has received funding from two venture rounds amounting to $4.4 million and $800,000. The annual revenue for the company is estimated at $960,000.
Sources
Sources