Important disclosures appear at the end of this report
GP Bullhound LLP is authorised and regulated by the Financial Conduct Authority
GP Bullhound Inc is a member of FINRA
GP Bullhound Hong Kong Limited is authorised and regulated by the Securities & Futures Commission
September 2021
Consumer
Subscription
Software
Spinning the CSS
flywheel to delight
consumers
GP Bullhound Global Insights
2
The view from GP Bullhound
Fast-forward three years, most people will
have 5-10 different CSS business subscriptions.
Entrepreneurs are continuing to build better
products, and consumers are seeing value in
these services because they truly make life
better. For many of us, the idea of paying $30 per
year to improve one’s life is very appealing.”
Eric Crowley, Executive Director
We believe that the CSS business model
enables companies to rapidly scale with
attractive margins while also providing a
compelling consumer value proposition. We
are excited to help guide CSS companies
through the next chapter of their evolution.”
Alec Dafferner, Partner
Table of contents
Our CSS Index shows private
consumer companies are set to
drive lively IPO market
Key CSS insights
From our CSS flywheel to
Western / Eastern
models, here’s what you
need to know
Expert views from
company builders
What CSS leaders and investors
have to say
CSS metrics
to watch
Niche end-verticals highlight a
broad landscape
What investors focus on and
key nuances
Getting the fundamentals right
Past CSS insights
Current CSS
ecosystem
Market update
A leading technology
advisory and investment firm,
providing transaction
advisory and capital
About us
B C
A
CONSUMER SUBSCRIPTION SOFTWARE –THE VIEW3
8
16
23
29
35
40
3
About GP Bullhound’s
CSS team
4
VICE
PRESIDENT,
RESEARCH
Jennifer.Eller@gpbullhound.com
Jennifer Eller
GP Bullhound’s CSS team
CONSUMER SUBSCRIPTION SOFTWARE
GP Bullhound’s CSS team leverages decades of collective experience, proprietary intelligence, deep industry relationships,
and leading data sources to identify and communicate what you need to know to stay ahead of the curve.
Our CSS practice is led by our San Francisco-based Executive Director, Eric Crowley, who has 10+ years of investment banking
and private equity experience.
PARTNER
Alec.Dafferner@gpbullhound.com
Alec Dafferner
EXECUTIVE
DIRECTOR
Eric.Crowley@gpbullhound.com
Eric Crowley
VICE
PRESIDENT
Okan.Inaltay@gpbullhound.com
Okan Inaltay
VICE
PRESIDENT
Garrett.Vaz@gpbullhound.com
Garrett Vaz
ASSOCIATE
Daniel.Kim@gpbullhound.com
Daniel Kim, CFA
ASSOCIATE
Gerry.Kelliher@gpbullhound.com
Gerry Kelliher
ANALYST
Daniel.Roberts@gpbullhound.com
Daniel Roberts
ANALYST
Adam.Segall@gpbullhound.com
Adam Segall
RESEARCH
ANALYST
Maria.Lazareva@gpbullhound.com
Maria Lazareva
About us
Market
update
Past
insights
B C
A
Key
insights
Q&A with
the CEO
Q&A with
investors
Ecosystem
Metrics
Research
team
5
B C
A
2019
2020
First investment bank with CSS focus
Consistently serving as a contributor and guide to the CSS
ecosystem and entrepreneurs
Deep domain expertise in consumer subscription sector
CONSUMER SUBSCRIPTION SOFTWARE
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Q&A with
investors
Ecosystem
Metrics
Past
insights
Previous CSS reports
Click on the images below to read more
Celebrated news articles
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6
GP Bullhound continues to lead in the CSS sector from both an advisory and an investment perspective
GP Bullhound’s recent CSS activity
CONSUMER SUBSCRIPTION SOFTWARE
ACQUIRED BY
INVESTMENT BY
INVESTMENT BY
Fund IV
INVESTMENT BY
ACQUIRED BY
INVESTMENT BY
Fund IV
INVESTMENT BY
Fund IV
ACQUIRED BY
INVESTMENT BY
ACQUIRED BY
ACQUIRED BY
ACQUIRED BY
INVESTMENT BY
Fund III
INVESTMENT BY
Fund III
ACQUIRED BY
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Q&A with
investors
Ecosystem
Metrics
INVESTMENT BY
CURRENT
CLIENT
INVESTMENT BY
CURRENT
CLIENT
CURRENT
CLIENT
Outdoor
exploration
Sell Side
Music
Sell Side
Language
learning
Sell Side
Fund IV
Fund V
Past
insights
Fitness
Sell Side
CURRENT
CLIENT
Job search
service
Sell Side
CURRENT
CLIENT
CONFIDENTIAL
INVESTMENT
Streaming
Entertainment
Provider
Growth
Equity Firm
CSS international
payments provider
CURRENT
CLIENT
Sell Side
7
How do you stack up?
CONSUMER SUBSCRIPTION SOFTWARE
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Q&A with
Investors
Ecosystem
Metrics
Past
insights
Click here!
Our passion is CSS, and core to GP Bullhound’s mission, we want to help the world understand the
ecosystem’s nuances and operators
CSS company owners and
investors – as a part of our
market research on the CSS
ecosystem, we want to learn
more about your business for
benchmarking purposes
Our online survey will take just
a few moments of your time –
less than 10 questions
All data will be aggregated
and kept anonymous
We ask all participants to
complete our online survey by
31 October 2021
Once we crunch the numbers,
we’ll send you the results!
Who?
What?
Where &
when?
We want to hear from you - take our CSS survey
8
Market update
9
Market update
CONSUMER SUBSCRIPTION SOFTWARE
Source: Sensor Tower, DataGrail, Edelman Trust Barometer, and GP Bullhound insights
Twitter Blue
Bookmark folder,
ability to undo
tweets, reader mode
Jun-21
$4.99/month
Discovery+
Streaming 55,000+
reality TV episodes
Jan-21
$4.99/month
Disney+
Access to ad-free
streaming titles and
on-demand movies
at extra cost
Nov-19
$7.99/month
Nitro
Enhanced Discord
experiences such as
extra emojis and
bigger uploads
Nov-17
$9.99/month
Established consumer
brands launch
subscription offerings
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Q&A with
investors
Ecosystem
Metrics
Past
insights
Multiple brands have launched subscriptions for their apps and websites
to generate recurring revenue and a stickier client base
10
Market update
CONSUMER SUBSCRIPTION SOFTWARE
Source: Sensor Tower, DataGrail, Edelman Trust Barometer, and GP Bullhound insights
Apple legal case versus
Epic, and impact on
App Store take rates
Apple’s App Store legal cases are beginning to
impact App Store take rates
The courtroom battle over the App Store’s 30%
take rate continues to drag on, with both sides
presenting compelling arguments
N a cracking
Increased antitrust pressure on the US Congress,
and in Asian countries and the EU, could see
Apple proactively making changes to avoid
court rooms
CSS investors and entrepreneurs could see
billions of dollars swing their way as Apple’s
walled garden is showing cracks
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Ecosystem
Metrics
Past
insights
Our
view
Apple recently announced several compromises for
developers, including allowing developers to notify
consumers about alternative payment options (web) over
email as well as allowing media apps to have an in-app link
Expect entrepreneurs to quickly move to take advantage of
web sign-ups or discounted renewals through the web
Q&A with
investors
11
Market update
CONSUMER SUBSCRIPTION SOFTWARE
Source: Sensor Tower, DataGrail, Edelman Trust Barometer, and GP Bullhound insights
With the release of iOS 14 in September 2020,
consumers are asked if apps can collect their
data for tracking purposes, including the Apple
IDFA. Consumers also have a dashboard to
quickly review all App Store subscriptions. This
change is widely expected to reduce consumer
targeting efficiency and conversion rates, driving
up customer acquisition costs.
Our
view
Short-term: CSS ecosystem
growth hampered by adoption
of iOS 14
Long-term: This will benefit the
CSS industry by forcing
companies to build better
products that attract customers
organically
▪ Reduced marketing efficiency to force CSS
businesses to focus on acquiring customers
organically through clever engineering and unique
value propositions
▪ Combined with the Apple Tax, iOS 14 to push
businesses to drive consumers to sign up through
web-interfaces, improving margins
▪ App developers are given an additional tool to
acquire, retain, and win back subscribers by using
an offer code for subscriptions
▪ The code can be distributed through any digital or
offline method, allowing a customer to access an
app for free or for a discounted subscription for a
specific duration
▪ Early surveys indicate 90-95% of consumers opt
out of being tracked, confirming industry fears
and hurting ad efficiency across platforms like
Facebook
▪ With Facebook ad personalisation and
performance hindered, CSS advertisers will look
for other avenues for advertising
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Ecosystem
Metrics
Past
insights
iOS 14 and impact on
industry growth:
Short-term pain = long-term gain
Q&A with
investors
12
‘Covid bump’ or
paradigm shift in
consumer preference?
Market update
CONSUMER SUBSCRIPTION SOFTWARE
Source: Sensor Tower, DataGrail, Edelman Trust Barometer, and GP Bullhound insights
Many CSS businesses had a fantastic 2020 as
consumers converted in-person activities to digital
experiences, including working out at home,
exploring the outdoors, or trying a new hobby.
As developed nations begin to emerge from the
pandemic, many investors are asking if Covid-
driven growth rates can be maintained. Last year’s
subscribers have started renewing and investors
are watching for early signals in renewal rates.
Based on GP Bullhound’s surveys, the transition to
subscription services will carry on as entrepreneurs
continue to roll out valuable offerings to help
consumers improve their everyday lives.
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Ecosystem
Metrics
Consumer
preference
Covid
bump
Paradigm
shift
Increased demand for high-
quality CSS businesses
Past
insights
Q&A with
investors
13
10.6x
5.6x
5.1x
8.7x
-
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
Aug-17 Dec-17
Apr-18
Aug-18 Dec-18
Apr-19
Aug-19 Dec-19
Apr-20
Aug-20 Dec-20
Apr-21
GPB CSS Index - TEV / LTM Rev Avg.
GPB CSS Index - TEV / NTM Rev Avg.
Our CSS Index shows growing public investor excitement
CONSUMER SUBSCRIPTION SOFTWARE
Source: Sensor Tower, DataGrail, Edelman Trust Barometer, and GP Bullhound insights
Debuts at 10.4x
TEV / LTM rev
Debuts at 5.4x
Debuts at 8.5x
Debuts at 15.2x
▪ Select private CSS
companies backed by
private equity
heavyweights and primed
for 2021-2022 IPOs
▪ Our CSS index, the first to
track how public CSS
investments are valued,
includes names such as:
▪ 2020: c.43 consumer IPOs
▪ Airbnb and DoorDash
defied the coronavirus
economy, saw attractive
public valuations
▪ Private consumer
companies followed,
making for a lively 2021 IPO
market
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Ecosystem
Metrics
Past
insights
Aug-21
Q&A with
investors
Debuts at 22.2x
Debuts at 27x
14
Robust M&A deal activity
CONSUMER SUBSCRIPTION SOFTWARE
Source: Capital IQ and Pitchbook as of 21 July 2021
= GP Bullhound provided transaction advisory services
Date
Target
Buyer
Category
Value
($m)
TEV/
LTM
revenue
Aug-21
Health and
Wellness
3,000.0
-
Aug-21
Prosumer
-
-
July-21
Outdoor
-
-
July-21
Fitness
300.0
4.0x
Jun-21
Entertainment
-
-
Jun-21
Utility
-
-
Jun-21
Education
-
-
May-21
Sports
250.0
-
Apr-21
Sports
-
-
Mar-21
Education
500.0
-
Date
Target
Buyer
Category
Value
($m)
TEV/
LTM
revenue
Mar-21
Outdoor
-
-
Mar-21
Music
-
-
Feb-21
Social
1,730.0
8.2x
Feb-21
Utility
1,000.0
-
Jan-21
Utility
600.0
-
Dec-20
Entertainment
1,180.0
-
Sep-20
Fitness
-
-
Aug-20
Education
792.0
4.0x
Jul-20
Fitness
345.0
-
Jul-20
Entertainment
325.0
-
Notable deals
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Ecosystem
Metrics
Past
insights
Q&A with
investors
15
Private financing surging
CONSUMER SUBSCRIPTION SOFTWARE
Source: Capital IQ and Pitchbook as of 21 July 2021
= GP Bullhound provided transaction advisory services
Date
Issuer
Lead investor
Category
Investment ($m)
Aug-21
Finance
100.0
Jul-21
Health
75.0
Jun-21
Music
50.0
Jun-21
Finance
100.0
Jun-21
E-commerce
130.0
May-21
Analytics
40.0
May-21
Health
540.0
May-21
Finance
900.0
May-21
Analytics
88.0
May-21
Home
50.0
Date
Issuer
Lead investor
Category
Investment ($m)
May-21
Education
225.0
May-21
Analytics
20.0
May-21
Education
50.0
May-21
E-commerce
227.0
May-21
Health
100.0
Apr-21
Finance
260.0
Apr-21
Education
68.0
Apr-21
Entertainment
60.6
Apr-21
Education
75.0
Apr-21
Fitness
220.0
Notable deals
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Ecosystem
Metrics
Past
insights
Q&A with
investors
16
GP Bullhound key CSS
insights
17
CSS flywheel attributes to drive premium valuation
CONSUMER SUBSCRIPTION SOFTWARE
A key valuation driver
for investors is the
concept of winner-
takes-all in CSS apps; if
the company has the
potential to dominate
a niche or a broader
market through
network effects,
investors will pay up
It is important for
entrepreneurs to
understand their
competitive
positioning and be
able to define their
market niche
We advise buyers on
CSS opportunities using
our flywheel
Recurring
revenue
Premium
content
Proprietary
data
User
acquisition
Monetisation
& pricing
strategy
Niche user
base vs.
large TAM
Churn/
retention
▪ Monopoly in a
small market can
be lucrative
▪
Large TAM apps
need to prove
differentiation
and moats (e.g.,
fitness apps)
▪ Create a compelling
benefit to convert
users from free to paid
▪
Free to paid
conversion rates are
critical KPIs
▪ Efficient user acquisition &
conversion with viral element
▪
Targeted ads, call to action,
SEO, & sharing content
proven successful
▪ User data retained &
utilised within app
▪ Network effects from
existing user base,
reinforcing proprietary
content and/or
monetised data
▪ Churn of consumer
subscriptions will be
higher than
traditional enterprise
SaaS models
▪
LTV/CAC a KPI to
watch
▪
Intuitive UI paired with
high-quality content
▪ Design & UX crucial to
convincing consumer of
premium product
▪ Verticals expanding as
consumers become
more comfortable
paying for apps
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Ecosystem
Metrics
Past
insights
Q&A with
investors
18
LTV captures a user’s gross profit
that is ‘scheduled’ to be
delivered to the company over
the lifetime of the user
Truth about LTV
CONSUMER SUBSCRIPTION SOFTWARE
(1) ARPU: average revenue per user; GM: gross margin
Definition of LTV
(lifetime value)
Formula1=
(ARPU ∗ GM%)
Churn Rate
To estimate LTV in
early-stage companies:
Find the locals
Illustrative user profiles
High engagement
Connect data sources
Find the service
through a friend
Integrate the service
into their life
Low engagement
Do not input data
Find the service
through an ad
Try lots of services
Sign up through discounts
▪ The formula assumes that all users eventually churn at an even
percentage each year or average.
▪
It does not take into consideration factors such as: upsells and re-
subscriptions
LTV does not account for fundamentally different user profiles – discounts
the ‘locals’ that stay for LIFE and over-emphasises the high ‘tourists’ churn
LTV issues
Measurement solutions
The LTV formula has several issues that need
to be understood:
▪ LTV engagement – comments,
photos, shares, posting activity,
connecting data sources, and logins
▪ Track auto-subscribe from
Apple/Google
▪ Web-users versus app only
▪ Tools to measure
engagement –
RevenueCat, AppsFlyer,
Recurly, etc
▪ Divide users into ‘locals’ vs ‘tourists’ cohorts by looking at
engagement metrics
▪ Estimate the value of ‘lifetime users’ in the local cohort and
then calculate each cohorts’ LTV
▪ Focus on the acquisition of ‘locals’ and optimise marketing not
for just sign-ups and return on advertising spend (ROAS), but for
long-term usage
▪ Discuss your average LTV, as it’s important for your customer
acquisition cost (CAC) payback, but ensure you highlight the
potential of your ‘locals’
‘Average’ user LTV
Days from acquisition
RetentionDebunking the issues of customer lifetime value
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Ecosystem
Metrics
Past
insights
Q&A with
investors
19
The new era of customer acquisition is organic
CONSUMER SUBSCRIPTION SOFTWARE
Traditional customer acquisition channels
Modern customer acquisition channels
Email
Schools
Partnerships
Strategy
CSS
companies
Create a community
of passionate users
that use the CSS
platform as a meeting
place
Build a strong brand
within app stores
that intrigues new
potential users
Leverage
infrastructure to
create engaging and
exclusive content that
attracts new users
Utilise friends and
family networks that
create a presence
for the company
across the Internet
Provide a free tool
for users that leads
to upgrades for
additional
functionality
Support power users
who advocate the
product to potential
customers
Leverage scalable
content to attract
users
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Ecosystem
Metrics
▪ Organic customer acquisition strategies are critical for CSS companies
▪ Generating a sustainable, low customer acquisition cost (CAC) delivery model is crucial to ensuring a sustainable,
profitable subscription business
▪ Successful, new-age CSS enterprises leverage low-cost or free channels to find and attract customers
Each CSS business must choose a strategy to find new customers and integrate that into its services as a feature or integral
part of the offering. The customer acquisition method is then organic or less invasive to the consumer, resulting in higher
conversion and retention.
Past
insights
Q&A with
investors
20
Internet browser extensions can be big businesses
CONSUMER SUBSCRIPTION SOFTWARE
Note: 1) Debugbear; and 2) Statista – Global desktop Internet browsers market share 2015-2021
Category highlights
Example extensions
Benefits
A browser extension is a small software module for
customising a web browser
Browsers typically allow a variety of extensions, including user interface
modifications, ad-blocking, and cookie management
Only 4.7% of
extensions support a
payment fee(1)
Google Chrome
67% of global
desktop Internet
browser market
share(2)
vs
vs
FREE
# of Google
Chrome extensions
globally
137,345
Integrate
directly into
daily workflows
Capture data
through web
browsing
Optimisation
with scale
Built-in
distribution
through
browsers
CRM, Marketing
E-payments, Finance
EdTech, E-learning
Sales
Extension
Media
Chrome extensions
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Ecosystem
Metrics
Past
insights
Productivity
Security
Note taking
Q&A with
investors
21
Hardware unlocks the modern-day subscription
CONSUMER SUBSCRIPTION SOFTWARE
Connected hardware has become a trojan horse for a recurring software
subscription but consumers are smart – the software must enable a better service
and constantly keep the experience refreshed – a true symbiotic relationship
Security
Fitness
Others
Health
This trend began with connected fitness, but hardware-enabled software has expanded into many new verticals
Once users commit to the hardware
purchase, the expected retention
rate for the subscription is high
Hardware acts as an
anchor, reducing the churn
from customers leaving for
marginally better or
cheaper platforms
The combination
personalises the
experience, creating a
passionate group of
users who evangelise the
product due to the
customer benefits
Hardware and software
are symbiotic with each,
making the other more
valuable to the
consumer – incentivising
the hardware purchase
and ensuring use
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Ecosystem
Metrics
Past
insights
Q&A with
investors
22
Chinese media giant
Tencent reported that
nearly 3x more
revenue came from
CSS than online
advertising in 2020(1)
Western CSS versus Eastern micropayments
CONSUMER SUBSCRIPTION SOFTWARE
Note: 1) Tencent 20-F, 2021
Eastern payment models
Western CSS business models
Western CSS platforms
Eastern CSS platforms
Western users focus on discrete, specialised apps
that address specific use cases
While Western users are often willing to subscribe
to different apps, too many can add up, be
hard to keep track of, and lead to fatigue
As a result, developers are opting for options that
allow them to capture ad revenue from free
users who choose to build their own stacks
Micropayments through tipping, donations and
pay per episode have become widespread
Users prefer comprehensive ‘super apps’ for all
their app-based needs, including messaging,
personal finance, and entertainment
Users can quickly connect their profiles to a
variety of services using existing Alipay or
WeChat payment platforms
Spotify’s users were
free in Q4 2020
55%
Integration | The evolution of the consumer experience
‘Pay per engagement’
platforms are rapidly
expanding in the West,
led by Patreon,
Cameo, and OnlyFans
Use cases where users only
want limited engagement
can still be monetised to
encourage them to
subscribe
Customised and exclusive
offerings involving customised
messages, photos and limited
merchandise are attracting more
users to digital experiences
Rapid expansion of
subscriptions given the
benefits for both the
user and businesses
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Ecosystem
Metrics
Past
insights
N
S
W
E
Q&A with
investors
23
Expert views from
company builders
24
LAND AND EXPAND WITH HARDWARE
WHY MONITISE TO PARENTS IN A CSS MODEL VERSUS SCHOOLS IN A LICENSING MODEL?
In its early days, PlayOn! Sports explored both models – selling to schools and selling to fans. Ultimately, we chose the
subscription model for fans as selling to schools is extremely challenging; schools have limited budgets for discretionary
expenses and those budgets are tied to tax revenues and overall economic health. Budgets can be very cyclical and
lead to substantial churn among schools. Ultimately, the model we chose was to invest up-front and install automated
production cameras at schools for free. This upfront investment won over the schools and significantly reduced sales
friction. We also found that parents love the convenience and easy to manage subscription offerings to watch their kids
play sports. This has resulted in attractive unit economics for PlayOn! Sports leveraging a CSS model.
WHY DID YOU FOCUS ON STREAMING VS. BROADCAST TV FOR LOCAL SPORTS?
High school sports occur in every city in the US with over 3 million events a year. Each event has a limited,
albeit passionate audience, that makes it difficult to justify an expensive TV production. There are some
marquee high school events, like football and basketball games, that are carried on local TV channels, but
the rest of the high school sports ecosystem doesn’t have the audience base to justify television production
and distribution. Instead, PlayOn! Sports has leveraged technology advances, such as automated
production camera technology and Internet streaming to be able to produce ANY AND EVERY high school
event for an extremely low marginal cost. By standardising our model, we have a national distribution
footprint consisting of local coverage. Each event drives incremental subscriber acquisition and significant
retention as high school sports is worshipped in most US states. With our increased scale, we covered over
300,000 events this school year and expect to cover over 1 million in 2021/22 school year.
WHAT IS PLAYON! SPORTS’S USER-ACQUISITION STRATEGY AND WHY HAS IT BEEN SUCCESSFUL?
PlayOn! Sports works with the state athletic associations and the individual high schools as partners, where we all provide
services to the other. PlayOn! installs automated production cameras, which allows the schools to promote their athletic
events and enables high school fans to watch their teams – regardless of where they live. In exchange, PlayOn! Sports
benefits from proprietary local content that has a passionate and sticky audience base. PlayOn! sells consumer
subscriptions, and the schools and associations benefit through a revenue share. Our partners utilise their marketing
channels to generate organic referrals which dramatically lowers our CAC. As we enter new markets or launch a new
school, we utilise paid marketing through the traditional digital marketing channels to let parents know of PlayOn!
Sports’s service and to build a base level of users. We keep our CAC low by marketing individual events to a very
targeted audience, but we do this at massive scale.
ARE YOU CONCERNED ABOUT THE CHURN OF CUSTOMERS LEAVING THE SERVICE?
At PlayOn! Sports, we have two groups of customers – ‘content partners’, the schools & athletic associations and the
‘end viewers’ – fans/parents/students/alumni. We are extremely focused on ensuring that the schools and athletic
associations feel valued and have a great experience with the partnership. So far this has been very successful as we
have had non-existent churn in schools over the last 4-5 years. On the customer front, we built our model to include churn
as sports seasons end, students graduate, etc. However, our model features a low cost-of-content and our CAC remains
affordable and predictable given the organic nature of our customer acquisition strategy. This enables us to operate
with profitable LTV and unit-economics even with predictable end-viewer churn.
David Rudolph
CEO
MISSION
We deliver live US high
school sports events to fans
whenever and wherever
they want it
LONG-TERM VISION
Cover every US high school
game across every sport
and then apply our model
to other niche sports or
underserved content
verticals
SCALE
300,000 games streamed in
2020/21 and more than 1
million in 2021/22
More than 700,000 active
subscribers
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Ecosystem
Metrics
Past
insights
Q&A with
investors
25
DELIVERING PERPETUAL LEARNING THROUGH SOFTWARE
WHAT DOES TOUCAN DO AND WHY DID YOU CHOOSE A CSS MODEL VS. ADVERTISING?
Toucan is a web browser extension that helps people learn a new language while going about their day. Each time
you visit a website, Toucan picks certain words to translate into your new language so you can learn them within the
context of a language you’re already comfortable with. We chose a CSS model so we could offer a compelling free
product while creating a compounding and predictable business model that grows and sustains the company. With a
premium subscription tier, we can offer high quality features that our customers expect and demand and still provide a
high-quality free experience for anyone interested in learning a new language.
WHY DID YOU AND YOUR TEAM DECIDE TO BUILD TOUCAN AS A BROWSER-BASED BUSINESS VS. A MOBILE
APP BUSINESS?
The short answer is that we wanted to meet people where they were… The three co-founders of Toucan have worked at
some of the best consumer tech and mobile app companies in the world, including Headspace. And a huge, consistent
problem with consumer educational products is that it’s hard to get people to take time out of their busy day, even for
just a few minutes. Plus, competition for time on people’s phones is only going to get more intense. So, rather than be
one more thing on someone’s to-do list, we decided to build Toucan on top of people’s existing Internet browsing
behaviour so they could learn while they went through their normal day. Not to mention, there are approximately
200,000 Google extension offerings vs. millions of apps, so the competition is substantially lower.
DO YOU HAVE ANY CONCERNS THAT THE MAJOR BROWSERS MAY SUDDENLY BLOCK TOUCAN?
Nope, not at all. Most browsers are looking for ways to differentiate themselves and become more valuable, useful tools
for consumers. Toucan makes people’s time on these browsers even more valuable, while also respecting their privacy.
In fact, we have such confidence in the browser extension ecosystem that we’ve recently launched on Safari, Firefox,
Brave, and Edge.
WHAT’S NEXT FOR TOUCAN?
We’re focused on making Toucan better and reaching even more people with it. That means launching
on more browsers, adding new languages to learn, and polishing the core experience so that we can
teach better and more effectively. We’re already rapidly winning over consumers and converting them
to our paid product.
Taylor Harlow
CEO
MISSION
To make the world bilingual
LONG-TERM VISION
To create a healthy,
empowering community that
breaks down cultural barriers
SCALE
150,000+ monthly active users
(MAU)
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Ecosystem
Metrics
Past
insights
Q&A with
investors
26
SEXY AUDIO STORIES THAT SPARK YOUR IMAGINATION AND MOOD
WHY BUILD DIPSEA AND WHO IS YOUR TARGET CUSTOMER?
We are helping women tap into their sexuality on their own terms. Lots of the female-focused solutions on the market
today are clinical in nature. Most erotic entertainment is made by and for men, but women have the same demand for
content. We saw a big gap in female focused content. Our core demographic is women aged 18 to 34. Dipsea solves
that big gap in content by providing our users grounded in aspirational reality and designed to inspire through
imagination and fantasy.
WHY CHOOSE CSS VERSUS OTHER REVENUE STREAMS?
A CSS business model is great for Dipsea for a few reasons. Our users have a regular demand for our content – we are
closer to Netflix versus a dating app. We consistently refresh our content so that our users find something new every week
– resulting in continuous entertainment deserving of a subscription. Finally – our users crave a premium experience and
have become comfortable with a subscription offering.
DO YOU WORRY ABOUT PEOPLE BECOMING SUBSCRIPTION FATIGUED?
Not really. As long as the subscription is providing value and people are using the app consistently and it's making their
life better, they won’t cancel.
WHAT IS YOUR USER ACQUISITION STRATEGY?
Currently, a large part of our growth is organic. Investors weren’t sure if people would want to talk about
erotic content when we started pitching Dipsea. There has been a big cultural shift in willingness to talk about
personal issues and interests more. Younger people are just more comfortable sharing in this category. In
addition, Dipsea by its nature, is a press worthy topic so we get solid engagement there. We are also
leveraging paid channels and have had a lot of success with podcast advertising. Given the similar audio
experience, we have found a lot of users through dating and female focused podcasts.
Faye Keegan
CTO/CO-FOUNDER
MISSION
Empower women to tap into
their sexuality on their
own terms
LONG-TERM VISION
Become a trusted partner for
women as they move
through their lives
SCALE
The idea that what we make
is niche is wildly incorrect
HOW HAS YOUR VISION FOR THE COMPANY EVOLVED?
Our Core mission is still the same - serving women in this space still has so much room to grow. While our core demo is 24-
35, our fastest growing category is 18-24. But we will continue supporting women throughout major points in their lives.
About us
Market
update
B C
A
Key
insights
Q&A with
Co-Founder
Ecosystem
Metrics
Past
insights
Q&A with
investors
27
VENTURE CAPITAL MANDATES FOR CSS BUSINESSES
HOW DO YOU THINK ABOUT THE EVOLUTION OF THE CSS INVESTMENT ECOSYSTEM?
DCM believes that we are in the middle of a big shift in the consumer Internet. Historically the primary method has been
monetisation through ads or the sale of data and now we believe subscriptions will come to be very important. We see
three characteristics where CSS businesses have the potential to be category winners – High gross margins, Recurring
revenue, Potential for exponential growth with organic customer acquisition.
HOW ARE YOU PICKING WINNERS IN THE CONSUMER TECH SPACE?
The first thing we do in any CSS investment is ask ourselves how these businesses are growing. Are they
acquiring customers efficiently with primary organic customer acquisition methods? Do they have a
unique organic strategy of finding consumers or generating word-of-mouth growth? Second, we focus
on subscription retention, which is key for DCM. At the earliest stages, retention calculations are more
guess work vs. a pure science. To arrive at a proxy, we look at what we believe are the early symbols of
high retention businesses – WAU/MAU levels. One thing that is always hard is TAM or market size. VCs are
bad here, so we think about it last.
Examples of ‘investment no’ for DCM include:
• Payback on CAC > 12 months and no sure way to get payback timelines to trend down
• Limited organic need for product
•
The core audience is hard to find
• Lots of competition already
WHAT IS ONE THING FOUNDERS CAN FOCUS ON IMPROVING AT THE EARLY STAGES OF THEIR BUSINESS?
Poor pricing strategy is a big area for improvement. A lot of CSS businesses underprice the value they bring to
consumers. Founders need to ask – what am I replacing or improving in someone’s life? For example, Breathwork is a
mindful breathing business that we are a fan of. How do you create a price for breathing – which someone can do for
free now?
DCM INVESTS IN CHINA AND THE US - HOW DO YOU THINK ABOUT CONSUMER BUSINESSES IN EACH COUNTRY?
The prevailing wisdom is that Asia is leading with its superapps like WeChat and Alibaba, but users in China are not used
to paying for apps in the consumer subscription model. They are instead interacting in a more transactional model by
either tipping influencers or buying individual content. I think that is why you have seen some of the Western apps
become so powerful globally as they can leverage their subscription revenue to grow faster and add more services.
David Cheng
PRINCIPAL
MISSION
DCM partners with inspired
entrepreneurs to build high-
impact, global technology
companies
Its global DNA and extensive
industry expertise are
foundational to maximising
the success of the
entrepreneurs
INVESTMENTS
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Q&A with
investors
Ecosystem
Metrics
Past
insights
28
VENTURE CAPITAL MANDATES FOR CSS BUSINESSES
HOW DO YOU THINK ABOUT THE EVOLUTION OF THE CSS INVESTMENT ECOSYSTEM?
TCG is staying very active in our core consumer verticals which includes CSS as well as ad driven and ecommerce
business models. One thing we have noticed is that a lot of businesses that don’t have a natural need or fit for a
subscription product are trying to shoehorn in a subscription model. For example, a great business that gets a lot of
website traffic and engagement tries to integrate a subscription offering. That may ultimately be less successful vs.
keeping the top of the funnel wide open and integrating ads or ecommerce options. Consequently, we are seeing the
blurring of the edge of traditional CSS businesses. Another trend we have been seeing is that traditional enterprise SaaS
terms have become very ubiquitous. Consequently, some of these terms have been adopted by consumer businesses
where they don’t accurately capture the true business KPIs. In a lot of cases these consumer businesses are trying to use
the same ‘SaaS Lingua Franca’ to speak to investors and it can cause confusion – i.e. – what does CSS ARR truly mean?
HOW ARE YOU PICKING WINNERS IN THE CONSUMER TECH SPACE?
TCG has deep consumer DNA from our founding days. We look for businesses that were created out of
authentic passion. Businesses where the founders built something that they and their friends wanted to
have and felt the market need. We stay away from ‘born in a boardroom business’. For example, within
our portfolio, some of the best consumer tech businesses are accidental companies built out of pure
passion. We invested in Surfline, which has been around for years. The founder built the business up over
time with one north star – real surfers need to know the conditions of the waves. They started monetising
with ads and gradually graduated to consumer subscription offerings.
HOW DO YOU THINK ABOUT VALUATION FOR CSS BUSINESSES AS AN INVESTOR?
Valuation is just one aspect of our evaluation process. We love durable and passionate businesses that have the
opportunity for blended business models - commerce/content/ads/subscription/data access. Ideal investments for us
have more than one revenue stream or the potential to add more ways to provide value to their customers. Our primary
focus is more on the brand and consumer engagement and then we get to valuation.
Luke Beatty
PARTNER
MISSION
TCG invests in companies
that define culture and
focuses on the media,
entertainment, technology,
sports, and consumer and
digital media sectors
INVESTMENTS
Linus Walton
VICE PRESIDENT
About us
Market
update
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A
Key
insights
Q&A with
the CEO
Q&A with
investors
Ecosystem
Metrics
Past
insights
29
Current CSS ecosystem
If we skipped your company – click here to
get in touch!
30
CONSUMER SUBSCRIPTION SOFTWARE
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Ecosystem
Metrics
Entertainment
Past
insights
Entertainment was a source of the explosion of CSS businesses, led by Netflix and Spotify but recently joined by new entrants
such as Mubi and PlayOn! Sports
Q&A with
investors
31
CONSUMER SUBSCRIPTION SOFTWARE
Fitness / Outdoor / Lifestyle
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Ecosystem
Metrics
Past
insights
The Fitness / Outdoor space has been the leader in converting freemium users to paid. Many of these companies started
offering a free or ad supported tool, but have gradually shifted towards a CSS revenue model for their biggest fans
Q&A with
investors
32
CONSUMER SUBSCRIPTION SOFTWARE
Prosumer
Health & Mindfulness
Personal Finance
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Ecosystem
Metrics
Past
insights
There has been significant growth in these categories, with many existing unicorns (Greenlight, Calm, Noom, and Asana) and
future unicorns (Grammarly, Flo, Natural Cycles, and Speechify)
Q&A with
investors
33
CONSUMER SUBSCRIPTION SOFTWARE
Edtech
Family/Dating
Other
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Ecosystem
Metrics
Past
insights
Edtech and Family / Dating have had an incredibly challenging yet positive performance through the pandemic as schools
and singles shifted to online ways to engage – keep a close eye on the Other category as new and exciting CSS businesses
are started daily
Q&A with
investors
34
The pool of CSS investors continues to grow
SIGNIFICANT RELATIONSHIPS WITH SPONSORS
Premier CSS financial investors
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Ecosystem
Metrics
Past
insights
Q&A with
investors
35
CSS metrics to watch
36
Implementation difficulty
Average revenue per user (ARPU)
Enterprise SaaS vs. consumer subscription
CONSUMER SUBSCRIPTION SOFTWARE
Source: Nico Wittenborn at Adjacent (@Adjacent on Twitter)
Investors look at many of the same investment metrics as
SaaS companies, but key nuances are important to
recognise, and CSS businesses will have a different
definition of success
Higher early user churn is typically the biggest hurdle for
traditional investors to overcome, but entrepreneurs can highlight
low customer acquisition cost (CAC) and long-term retention to
illustrate the staying potential of their CSS business.
Consumer subscription
Enterprise SaaS
Mass market potential
Word of mouth (WOM) distribution
Churn
Content sharing
Expansion revenue
Acquisition costs
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Ecosystem
Metrics
Higher
Higher
Higher
Higher
Higher
Higher
Higher
Higher
Past
insights
Q&A with
investors
37
Investor benchmarking criteria
CONSUMER SUBSCRIPTION SOFTWARE
CSS investors evaluate each business based on its own unique
attributes as well as sub-industry nuances
There are industry standard metrics that help investors
differentiate good businesses from great businesses
Annual user
growth rate
<50%
100%+
<60%+
90%+
Gross margins
<3x
6x
LTV/CAC
1st pay period
churn rates
>50%
20%
<2%
10%+
Free to paid
conversion rate
<0.5x
2.0x
Sales efficiency
ratio
About us
Market
update
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A
Key
insights
Q&A with
the CEO
Ecosystem
Metrics
Past
insights
Q&A with
investors
38
▪
Investors will look closely at users – including the free users, active users (MAU) and most importantly the paid users
▪ CSS top-line revenue can be measured in several ways:
– Cash bookings: Amounts received each month in upfront subscription payments
– Monthly recurring revenue (MRR), annual recurring revenue (ARR), and GAAP revenue
▪
Important to show continued efficient growth in top-line metrics
▪ Customer lifetime value = number of months or years the average customer stays with the company multiplied by the
ARPU times the gross profit margin (%)
▪ CSS businesses have the unique attribute in that they typically have high churn after the first pay period or trial period
ends. Companies typically see churn of first-time users anywhere between 20% and 70% of total sign-ups
− Consequently, investors are looking for retention of users AFTER the first pay period – typically the 3rd, 6th or 12th month.
High retention in those periods indicate that users are discovering value in the service and are likely to be retained
long-term, building the ‘CSS cohort layer cake’
− Exceptional CSS businesses renew 50%+ of each annual cohort and 40% of Year 2
▪ Customer acquisition cost (CAC) payback period is typically stated in months. Represents the time taken to fully pay back
sales and marketing investment to acquire a single customer
▪ CAC Payback of <3 month is critical to counter the high churn of initial users
▪ 50%+ of users coming through organic channels is generally considered great
▪ Free users: Number of users using the platform or business. Typically measured monthly or MAU
▪ Paid users: Number of users paying for a subscription (typically monthly or annually)
▪ Free to paid conversion rate: The ratio of users who start as free users and convert to paying users. This number varies by
industry and type of business as well as how the benefits behind the paywall are structured and accessed
▪ Growth is of paramount importance, with excess cash being used to fuel growth
▪
Important, therefore, to understand the cash burn in the business and planning for capital efficient hyper-growth
▪ The type of service or content being provided can vary between CSS industries. For example, exercise apps develop
fitness classes at a high cost while a hiking app may be leveraging user-generated content (UGC) to enhance its offering
▪ Typically companies leveraging UGC have higher gross margins and a sustainable competitive advantage as their
product and service is influenced and improved by the content and data users are generating
▪ Investors have proven to be willing to pay up for CSS businesses leveraging UGC to provide a unique service
Investor dive into key CSS metrics and KPIs
CONSUMER SUBSCRIPTION SOFTWARE
Top-line growth metrics –
user growth & bookings
MRR/ARR
LTV/CAC ratio
Free to paid conversion
rates
Free cash flow / burn rate
Gross margins
About us
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A
Key
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Ecosystem
Metrics
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insights
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investors
39
▪ Normalised measurement of recurring revenue, most frequently
measured with a constant value in each month of the
subscription period
▪ Amount of gross profit a customer is calculated to deliver to the
company over the lifetime of the customer
▪ The number of months a company requires to pay back its cost
of customer acquisition
▪ Gross churn is the number of customers lost in a given period or
cohort regardless of account expansion or growth
▪ Net churn is the number of customers gained or lost in a given
period or cohort after taking into consideration new,
reactivated, or expanded accounts
Key CSS definitions & formulas
DEFINITIONS & CALCULATIONS
Top-line growth metrics –
user growth & bookings
MRR/ARR
Customer lifetime value
(CLV)
Payback period
Churn (gross & net)
▪ All S&M expenses for new customers. Sometimes excludes
personnel management S&M costs
▪ Typically measured over a month or quarter
▪
Includes users acquired through free and paid channels
Customer acquisition cost
(CAC)
CAC =
S&M
# of new customers
CLV =
ARPU ∗ GM
Churn rate
Payback period =
CAC
ARPA ∗ GM
Net churn =
(customers lost
over time period − customers gained
over time period)
customers at
beginning of time period
Gross churn =
customers lost over time period
customers at beginning of time peirod
MRR = # of paying customers ∗ ARPA/month
Metric
Definition
Calculation
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Ecosystem
Metrics
Past
insights
Q&A with
investors
40
Past CSS insights
B C
A
41
Paid experiences
Riding leaderboards
Download maps
Meditation classes
Wearables integration
The importance of the paywall
CONSUMER SUBSCRIPTION SOFTWARE
Gaining users through a ‘freemium’
offering is critical to encouraging people
to try a product; however, to effectively
monetise them, they need to be
converted into paying customers
That means correctly placing the
paywall at the correct point to provide
the maximum value to paying
subscribers but enough functionality to
explore the service before paying
Success in the CSS space
depends on placement of
the paywall within the
customer’s experience
Free experiences
One video story
One free class
Three free books
7-day trial
1
2
3
Gain the customer
contact information,
download app, and
enter credit card
details
Entice interest in the
product
Highlight features
that are included in
the paid version
About us
Market
update
Past
insights
B C
A
Key
insights
Q&A with
the CEO
Ecosystem
Metrics
1
2
3
Monetise and
increase customer
engagement and
provide unique
value
Encourage sharing
and create user
generated content
(UGC)
Continuously
improve product to
attract adjacent
users
Goals
Goals
Q&A with
investors
42
Overcoming churn to build the ‘cohort revenue layer cake’
CONSUMER SUBSCRIPTION SOFTWARE
Source: GP Bullhound proprietary analysis
Cheetah
Thoroughbred
As entrepreneurs build their companies, they can typically invest in growth marketing or product innovation to drive retention
Focusing on engagement and mitigating churn will result in a better long-term business than high growth and flashy advertising
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
Cheetah
Cohort
1/1/2020
2/29/2020
3/31/2020
4/30/2020
5/31/2020
6/30/2020
7/31/2020
8/31/2020
9/30/2020
10/31/2020 11/30/2020 12/31/2020 1/31/2021
2/28/2021
3/31/2021
4/30/2021
5/31/2021
6/30/2021
7/31/2021
8/31/2021
9/30/2021
10/31/2021 11/30/2021 12/31/2021 1/31/2022
2/28/2022
3/31/2022
4/30/2022
5/31/2022
6/30/2022
7/31/2022
8/31/2022
9/30/2022
10/31/2022 11/30/2022 12/31/2022
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
Throughbred
Cohort
1/1/2020
2/29/2020
3/31/2020
4/30/2020
5/31/2020
6/30/2020
7/31/2020
8/31/2020
9/30/2020
10/31/2020 11/30/2020 12/31/2020 1/31/2021
2/28/2021
3/31/2021
4/30/2021
5/31/2021
6/30/2021
7/31/2021
8/31/2021
9/30/2021
10/31/2021 11/30/2021 12/31/2021 1/31/2022
2/28/2022
3/31/2022
4/30/2022
5/31/2022
6/30/2022
7/31/2022
8/31/2022
9/30/2022
10/31/2022 11/30/2022 12/31/2022
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
Cheetah
Cohort
1/1/2020
2/29/2020
3/31/2020
4/30/2020
5/31/2020
6/30/2020
7/31/2020
8/31/2020
9/30/2020
10/31/2020 11/30/2020 12/31/2020 1/31/2021
2/28/2021
3/31/2021
4/30/2021
5/31/2021
6/30/2021
7/31/2021
8/31/2021
9/30/2021
10/31/2021 11/30/2021 12/31/2021 1/31/2022
2/28/2022
3/31/2022
4/30/2022
5/31/2022
6/30/2022
7/31/2022
8/31/2022
9/30/2022
10/31/2022 11/30/2022 12/31/2022
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
Throughbred
Cohort
1/1/2020
2/29/2020
3/31/2020
4/30/2020
5/31/2020
6/30/2020
7/31/2020
8/31/2020
9/30/2020
10/31/2020 11/30/2020 12/31/2020 1/31/2021
2/28/2021
3/31/2021
4/30/2021
5/31/2021
6/30/2021
7/31/2021
8/31/2021
9/30/2021
10/31/2021 11/30/2021 12/31/2021 1/31/2022
2/28/2022
3/31/2022
4/30/2022
5/31/2022
6/30/2022
7/31/2022
8/31/2022
9/30/2022
10/31/2022 11/30/2022 12/31/2022
105,000 users
by month 6
47,000 users
by month 6
New user
marketing is cut
Long-term valuable customersWhat
would you
invest in?
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Ecosystem
Metrics
Past
insights
▪ Growth: Adding 30,000 users per month with celebrity promoters
and heavy Instagram presence
▪ Usage: Limited customisation of the service and a priority on
notifications to consume content
▪ Cohort Churn: Retains 40% of customers by month 6 and only
10% by month 12
▪ Growth: Adding 10,000 users per month leveraging targeted
marketing through partnerships with limited social media
marketing
▪ Users leverage the data to manage their personal health
information and have synched data input into their fitness
tracker
▪ Cohort churn: Retains 68% of customers by month 6 and 50%+
by month 12 (effectively having the cohort become flat)
Q&A with
investors
43
Essential building blocks of subscription development
CONSUMER SUBSCRIPTION SOFTWARE
Companies are quickly building the ‘pick-axes and blue jeans’ companies of the CSS gold rush
Omnichannel tools are becoming market ready to allow niche consumer subscription companies to launch quickly
Subscription
management
Marketing
management
Messaging
infrastructure
Reporting &
analytics
Payment
processing
+
About us
Market
update
B C
A
Key
insights
Q&A with
the CEO
Ecosystem
Metrics
Past
insights
Q&A with
investors
44
0
20
40
60
80
100
120
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
2012
2013
2014
2015
2016
2017
2018
2019
2020
Pandora-Revenue ($m)
Spotify-Revenue ($m)
Pandora-Paid Users (m)
Spotify-Paid User (m)
Historically, investors have been
conditioned to believe that consumers
will always prefer a free option
supported by ads versus paying
1
That was true in the early ages of the
Internet, but consumers are waking
up to the pitfalls of ‘free’, including
intrusive ads, the sale of personal
data, and poor product quality
2
Pandora and Spotify started as free
apps, using ads to generate revenue,
and that is where the story diverged
3
Spotify focused on UX, adding features
like downloading songs and playing
music offline behind paywall – paid users
quickly accelerated, revenue surged
4
Pandora focused only on ads, was late to
the subscription game, and was ultimately
sold to Sirius
5
Free + advertising versus paid subscription –
the ultimate test
CONSUMER SUBSCRIPTION SOFTWARE
Sources: Capital IQ and Pitchbook (2020 estimates from Capital IQ)
Pandora versus Spotify
Paid vs. free content battle
vs.
vs.
vs.
vs.
vs.
vs.
About us
Market
update
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A
Key
insights
Q&A with
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Ecosystem
Metrics
Past
insights
Q&A with
investors
Spotify paid
subscription
launched
45
Pricing versus utilisation
CONSUMER SUBSCRIPTION SOFTWARE
Sources: Public data and GP Bullhound research; 8tracks, $30/yr; rever, $48/yr
Annual subscriptionpriceHigh
Low
Usage frequency
< Monthly
Daily
$168
$120
$100
$100
$60
$80
$60
$45
$150
$40
$30
$99
$10
$70
$36
$99
$70
$80
$39
$71
$80
$24
$45
$60
$80
$80
$30
$47
$71
$90
$80
$60
$50
$119
$128
$120
$120
$144
$100
$60
$144
About us
Market
update
B C
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GP Bullhound overview
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A leading technology advisory and investment firm
ABOUT GP BULLHOUND
Note: 1) League table data represents selected transaction advisors; time period: 2016-Q4 2019; global M&A transactions
between $10m and $300m
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▪ No. 1 global advisor (1) to leading technology companies
in competitive international sale and acquisition processes
▪ 430 successful M&A transactions completed to date, with a
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▪ GP Bullhound’s funds provide investors with access to global
category leading technology companies
▪ Our assets under management total more than $500m and
our limited partners include institutions, family offices and
entrepreneurs
▪ Leading global advisor to companies and their owners on
capital transactions including venture, growth, debt,
acquisition funding, secondary block trades and initial
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▪ 120 rounds of financing for technology companies
completed to date, with a total value of $2bn
▪ Our events bring together thousands of leading technology
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▪ Our global insights team publishes thought-leading research
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In the last twelve months, GP Bullhound LLP or an affiliate is or has been engaged as an advisor to
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report: Amazon, Apple, Asana Rebel, CareerFoundry, Cleanshelf, Customer Thermometer, Discord,
Facebook, Fishbrain, Flexjobs, Glovo, HackerOne, Klarna, Lingoda, Match Group, Mubi, Oxbotica,
Partnerize, PayPal, Pinkbike, Playtomic, RealVNC, Recruitee, Revolut, Salesforce, Signavio, Slack,
Spotify, Unity Technologies, Vivino, and Whoop.
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