Skip navigation

Category Archives: Commentary

Clare Capital Technology Insight Reports

Clare Capital produces a free, weekly two-page, graphic-heavy technology insights report on a range of topics from acqusitions to metrics to multiples. We currently have over 1,000 subscribers including technology executives, directors, investors and commentators across NZ, Australia and the US.

See attached some previous examples of our weekly technology insight reports:

If you would like to be added the distribution list. Email Mark Clare at mark.clare@clarecapital.co.nz

As always, questions, comments and new subscribers are all welcome.

Yellow Pages vs Trade Me

Following the 70% sale of the Sensis directories business from Telstra (Australia) to a US based private equity firm, Platinum Equity for A$454 million – blog post to come later – we thought we would illustrate the significant differences between NZ’s largest directories business vs NZ’s largest online auction/e-commerce website.

The following two graphs highlights the compelling difference comparing Yellow Pages (a largely print-based business) to Trade Me (a 100% online business). The results below show the impact technology has had on each company over the course of the last seven years:

Yellow Pages vs Trade Me - Revenue

Yellow Pages vs Trade Me - EBITDA

Note: the two data points (we are only showing the 2007 and 2013 numbers) for both Yellow Pages and Trade Me are from the financial years 2007 and 2013.

Clare Capital’s Thoughts on Xero’s Valuation

We produced a Thought Piece on our take on Xero’s valuation at the beginning of October 2013, before the US$150 million capital raise and when the share price was trading at $19.00. Three months later the share price is now at $42.00.

The Executive Summary of the Thought Piece is highlighted in the bullet points below:

  • Xero is a high-growth technology company and not a Ponzi scheme.
  • Losses are fine as long as value is being created.
  • However – from a fundamental valuation perspective Xero is a challenge. First – there are a wide range of future potential growth scenarios. Second – we don’t know when Xero will move to being cash flow positive. From patient for profit and impatient for growth – to the reverse.

Read more