Later Buys Mavely for $250M / Valuation Multiples and Deal ROI
RockWater Roundup
RockWater analysis to make you a better investor and operator. Today we discuss Later’s acquisition of Mavely, including the deal logic, rationale for a potential agency VS tech valuation multiple, and an ROI analysis of PE investor Summit’s tripling down for a $500M total investment.
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Later just bought Mavely for $250M.
Let’s break it down…
— TARGET: Mavely —
OVERVIEW
- Affiliate social commerce platform for “everyday influencers”
- Founded 2018 by Evan Wray (CEO), Sean O’Brien (CTO)
- Nu Skin parent co is seller
- Based in Chicago
- 75-100 employees
COMPANY HIGHLIGHTS
- 15.4M influencer-driven purchases in 2024
- $16M paid to creators from Jan to Jul 2004
- 120,000+ creators
- 1,400+ brands
FINANCIALS
- GMV of $675M (May to Jul 2024 run-rate)
- 175% YoY GMV growth for above period
- Current GMV of $1B (per Later CEO LinkedIn post)
- GMV take rate of 10-40%
CAP MKTS HISTORY
- 2019: $1M seed at $4M pre
- 2021: Acquired by Nu Skin for $41M
- 2025: Acquired by Later for $250M
— TARGET OWNER: Nu Skin —
OVERVIEW
- Personal care and supplement company
- Publicly traded on NYSE: NUS
STOCK PRICE
- $6.65 (1.9.25)
- Down 64% YoY
FINANCIALS
- $331M market cap
- $595M enterprise value
- 2024 revenue guidance: $1.7B (pre sale)
- Sep YTD op margin (proxy for EBITDA): 4.1%
- 2024 op margin at 4.1%: $70M
- 6.1x ROI for 3 year Mavely hold: $250M / $41M (assumes earnout achieved)
— BUYER: Later —
OVERVIEW
- Influencer marketing (IM) and social media mgmt (SSM) company
- Founded 2014 by Lyle Stevens (CSO), Chris Wolfel, Sean Naegeli
- Based in Boston
- fka as Mavrck
- 250-500 employees
SERVICES
- Influencer Marketing
- Social Media Management
- Social Listening
- Link in Bio
COMPANY HIGHLIGHTS
- 6,900+ campaigns launched
- 570+ business served
- 53M+ engagements
CAP MKTS HISTORY
- 2014-2018: <$25M investment
- 2019: buys GroupHigh for influencer search
- 2021: Summit invests $120M
- 2022: buys Later for $135M for SMM (financed by Summit)
- 2025: buys Mavely for $250M (financed by Summit)
— DEAL DETAILS —
OVERVIEW
- Announced 1.3.25
- $250M purchase price
CONSIDERATION MIX
- Majority cash
- Minority equity in combined co
- $33M paid to other Mavely equity holders
DEAL RATIONALE
- Enhances Later’s technology, influencer network, and customer base
- Combines first-party data, software, and services to improve ROAS
- Combines influencer content and creator-driven commerce for “full funnel impact”
- Creates more comprehensive platform for both creators and brands
- Helps Later compete with other scaled IM and SMM companies
POST OPS
- Mavely CEO, CEO, and CFO will join Later
- Mavely to continue providing capabilities to Nu Skin’s affiliate marketing biz
VALUATION
- See my analysis of revenue and EBITDA multiples below
WHAT ELSE I FIND INTERESTING & DEAL INSIGHTS
A couple quick hits here, as I’m in Dubai for the 1 Billion Followers Summit and need to get to some meetings…
My methodology on estimating valuation multiples, and what surprises me…
(AUTHOR’S NOTE: I made a mistake in my previous analysis when I applied Mavely’s take rate to total, instead of net, GMV. I corrected below. Thanks to our reader community for the feedback).
Based on a company press release, Mavely paid out $16M to creators in affiliate commissions for Jan to July 2024. If you factor in seasonality for back-to-school and holiday season, assume there’s a large GMV bump in back half of year, and that $40M is the total commissions payout for all 2024.
Mavely’s take rate is 10 to 40%. I assume the mid range of 25%, and that its a % take of the net affiliate commission from GMV. I estimate that at 10%.
Here’s a simple economics waterfall to explain my affiliate math…
- $100 sale (total GMV)
- 10% total affiliate commission to Mavely as retailer
- That’s $10 net GMV
- Mavely takes 25%, or $2.5
- Influencer takes 75%, or $7.5
Now, let’s use that structure and reverse it to get to Mavely’s estimated 2024 revenue and EBITDA…
- $40M creator affiliate commissions based on our estimate above
- If $40M is 75% of total affiliate commission based on our estimated Mavely take rate of 25%, then divide by 3 to estimate Mavely’s commission
- That’s $13.3M of net revenue to Mavely for 2024, or $53.3M of gross revenue (40 + 13.3)
That implies revenue multiples of…
- 4.7x gross revenue multiple ($250M / $53.3M)
- 18.8x net revenue multiple ($250M / $13.3M)
I’d think affiliate businesses with 8 figures of net revenue are still reinvesting in growth, and thus likely doing 10-15% EBITDA margins of gross revenue, or less than 50% of net revenue.
Call that $6M of EBITDA for Mavely, or 12% margin.
Implies 42x LTM EBITDA ($250M / $6M).
That feels very high and would imply a high growth rate. Let’s deep dive there…
Mavely reported $675M run-rate GMV in Aug 2024 (up 175% YoY). But Later CEO Scott Sutton said GMV was $1B at time of sale per his LinkedIn post. I’m going to assume the $1B GMV is also a run-rate figure.
That’s about 50% growth in 6 months, or about 100% YoY. That’s strong growth, more than Influential which was reported to be 50% YoY for net revenue ($100M to $150M, my deal analysis here).
My Influential analysis showed around 3.3x LTM revenue and 15x LTM EBITDA. But reminder that Influential has a different biz model as an IM platform, not an affiliate platform. It was reumored that Influentials’ net revenue was around 45%, or significantly higher than our 25% Mavely estimate.
The Mavely valuation multiples compared to the Influential multiples are 42% higher for gross revenue and 180% higher for EBITDA.
That’s a strong premium considering the MUCH smaller scale.
Further, the deal structure is also aggressive in that the majority of consideration was cash, and not equity (with more of the latter, we see valuations above the market average).
Of note, in my previous mistaken analysis where I assumed $200M in Mavely revenue (20% of $1B GMV), I arrived at 8.3 to 12.5x LTM EBITDA multiple range based on 10-15% EBITDA margin.
I let my past perception of market multiples bias my analysis, because that range felt more in line with my expectations for an affiliate and influencer marketing business that:
- combines brands and creators with a tech-enabled marketplace
- but that only scales to larger campaigns with premium brands through a sizeable and continued investment in a brand partnerships and services team
Reminder, I’m just speculating and don’t know the actual financial figues and multiples here. If the net GMV commission rate is 15% to 20% instead of my estimated 10%, that materially changes the figures here.
Or, perhaps market valuations are changing, and that’s something we’d definitely want to know.
Why is Summit tripling down via a $500M investment, and will this end well?…
Let’s look at Summit’s investment history….
- 2021: Summit invests $120M into Mavrck (nka Later)
- 2022: Mavrck buys Later for $135M (financed by Summit)
- 2025: Later buys Mavely for $250M (financed by Summit)
Let’s assume Later didn’t use any balance sheet cash for M&A, and the parent co equity is a small minority of the Mavely deal consideration. Let’s also assume no debt was used for the Later and Mavely deals, and no leverage has been put on Later.
If that’s right, then the total Summit investment comes out to around $500M over a four year period.
That is A LOT for an influencer and affiliate business enhanced by technology at the reported GMV and revenue figures, and that requires a meaningful investment in team to scale revenues and brand partners.
Here are benchmarks of other large IM and creator affiliate investments:
- Influential raised $52M between 2014 to 2021, did about $150M in net revenue at time o sale, and sold for $500M including earnout to Publicis in July 2024 (my deal analysis)
- ShopMy is a fast-growing creator affiliate platform that raised $19M in April 2024 (is supposedly closing another round soon), and has 50,000+ brands on platform. It’s reported they do $20M in 2024 revenue, up from $4M in 2023 (my deal analysis)
- LTK, a scaled affiliate platform, has raised $315M, has a multi-billion dollar valuation, does over $5B in GMV. With a take rate between 10-30%, their estimated net revenue is $500M to $1B.
This small subset of relevant benchmark investments highlights that Summit’s $500M bet on IM and affiliate commerce is outsized when considering Later / Mavely’s combined GMV and revenue scale.
Therefore, it feels that a lot is going to have to go right to get an over 30% annual IRR by Summit, which is a standard return benchmark for PE.
Summit’s entry prices into Mavrck, Later, and Mavely don’t feel on the low end, and Later will need a buyer willing to write a high 9 or 10-figure check for a future exit. The large agency hold co’s like Omnicom / IPG and Dentsu could be buyers. TBD if WPP and Publicis are satiated with existing IM / affiliate acquisitions, or want more. Outside the agency hold co buyer cohort, I don’t know many firms today that have the investment mandate, and financial wherewithal, to make an investment into IM and affiliate commerce of that size.
That being said, the creator economy is evolving and growing quickly. And as we know from our own M&A sales processes for clients, the buyer groups are expanding quickly. Summit is clearly very bullish on the future, and time will tell if they’re right.
This will be a good deal to track.
I’m the founder of RockWater Industries. We do M&A and strategy advisory for creator economy and digital agencies. From buy and sell-sides and fundraising, to consumer research and go-to-market planning.
DM me on LinkedIn or email me chris @ wearerockwater dot com
