Miro

🚨 Disclaimer

1. All research on startup and the whole investment memo has been done for personal use of Akim Arhipov.
2. Please note, this is a late stage secondary deal so we are following the information we managed to gather and this report does not contain as deep information as you may have gotten used to.
3. While preparing this deal, we have been taking the logic and information we managed to get from Accumulator (VC fund), who participated in the secondary deal recently.

Miro's mission is to empower teams and individuals to collaborate visually, unlocking their full potential for innovation and problem-solving.

Overview

MIRO is the leading visual collaboration platform, revolutionizing team communication and collaboration for remote, in-office, and hybrid teams. With the ability to connect people across formats, tools, channels, and timezones. Miro eliminates the limitations imposed by physical location, meeting space, and whiteboards.

Its impressive lineup of over 100 integrations with top technology partners such as Atlassian, Cisco, Google Workspace, Microsoft Teams, and Zoom allows users to seamlessly incorporate Miro's visual collaboration layer into their existing workflows, tools, and processes. With the remote workforce estimated to over 55% in the US during 2023, Miro's versatile and adaptable platform meets the growing needs of modern work environments.

Furthermore, Miro's strong financial position is evidenced by its positive operating cash flow and a significant cash pile of $400-500 million. In January 2022, Miro successfully attracted $400 million in funding.

While the introduction of Apple's Freeform app for creative brainstorming and collaboration in December 2022 presents competition, Miro remains the frontrunner in the visual collaboration space.

Data

Founded: 2011

Headcount: ca.1800

Users: 50m+, global

TAM: 600m+ users

ARR: $530m+

• Growth is 2022 was +60%
• Projected ARR in 2026 is at $2bn

Raised until today: $474m

Latest valuation: $17,5bn (Jan 2022)

As reported by Research and Markets in June 2022, the global business productivity software market is poised to grow by $98.39 billion during the 2022 to 2026 forecast period, expanding at a CAGR of 14.24% during the forecast period. According to the report, one of the leading factors contributing to the market’s growth is the automatic updating and enhancing coherency in business operations. The source adds that increasing security concerns in cloud deployment for organizations and rising demand for business intelligence and AI (artificial intelligence) is expected to lead to sizable demand in the market.

Main Competition

The main competition, considering the stage of Miro is circling around 3 alternative companies.

Risks

1. Low "Business death" risk: The company boasts a substantial cash balance of over $400 million and is already profitable, reducing the risk of financial instability (2022).
2. Medium growth risk: While the company has shown impressive revenue growth of over 50% between 2022 and 2023, sustaining this growth could be challenging as it approaches a $500 million Annual Recurring Revenue (ARR) mark.
3. Medium valuation risk: The company's valuation has not been independently confirmed through third-party transactions, posing a moderate risk in terms of accurately assessing its worth.

During the time in the US, we have identified and approached several an early advisors/investors of Miro. After long conversations, seeking to get the lowest possible price, we have identified an early advisor, who seemed like the best candidate.

After presenting the valuation logic and numerous conversations, we reached an agreement to buy a portion of shares with an fff.vc syndicate. The pricing logic was taken well and we managed to agree a deal that is discounted -30% from the last round, setting the valuation of the company to 12.25bn$.

This price is better than the last transaction that we know of, offering fff.vc members to purchase Miro stocks on more favourable terms.

Valuation and logic

We are following the logic of the recent transaction by the Accumulator, purchasing Miro stocks from the secondary market.

Based on the information provided, the average revenue multiple of traded comparables (Figma / Adobe) has decreased by 2.8 times from ×25 to x9 since January 2022. Assuming a 108% premium to the average publicly traded multiples, the revenue multiple applied in January 2023 is 18x. The M&A multiple without the M&A premium is 30x, based on the Figma deal, while the average multiple applied is 24x (considering both traded and M&A multiples). Consequently, the valuation of Miro at a 24x revenue multiple amounts to $12.8 billion.

Logic

Miro, the leading visual collaboration platform, has a strong foundation that contributed to its valuation. Here's a breakdown of the factors considered:

1. Impressive Market Presence:
• Operating in San Francisco and Amsterdam with 12 hubs worldwide.
• Boasting over 50 million users globally, showcasing a significant user base.
2. Financial Strength:
• Demonstrating positive operating cash flow, indicating a healthy financial position.
• Accumulating a substantial cash pile exceeding $400 million.
3. Robust Revenue Growth:
• Forecasting an impressive 50% compound annual growth rate (CAGR) for the next four years, projecting revenue to surpass $2 billion.
4. Top-Tier Backing:
• Supported by renowned funds Accel and ICONIQ, highlighting strong investor confidence.
5. Raised-to-Value Ratio:
• The valuation for the Accumulator deal was calculated using a raised-to-value ratio of ×27, reflecting the Accumulator's valuation methodology.
6. Last Round Valuation:
• In the previous funding round in January 2022, Miro achieved a post-money valuation of $17.5 billion.
7. Accumulator Deal Valuation:
• The Accumulator deal resulted in a valuation of $12.8 billion.
• This valuation was derived by multiplying a decreased revenue multiple by -2.2x with an increased revenue growth of +1.6x, combined with a 27% discount to the last round valuation.
8. Total Funds Raised:
• To date, Miro has successfully raised a total of $476 million in funding.

By considering these factors and utilizing valuation methodologies, Miro's valuation was determined, reflecting its market presence, financial performance, growth potential, and investor confidence.

Allocation: up to $300 000

Valuation: $12.25B (30% discount to the last round)

Minimal ticket (for fff.vc members): 10 000€

Fees for fff.vc members: 7% on off fee + 7% carried interest

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