Tech start up Symphony valued at $1.4 billion pushed back upon lack of profitability.
You heard it right! With a alleged whooping 1.4 Billion dollar valuation you would think this giant would at least turn a profit but apparently it doesn’t.
Symphony is a start up that is focused on targeting Bloomberg’s clientele base, while it has impressively gained over a reported 435,000 users (topping Bloomberg’s 325,000 users) it has still failed to bring in profits.
Large Institutional Backings
Backers include Blackrock, J.P. Morgan Chase, Goldman Sachs, and several other financiers whom have injected over $460 million however it doesn’t stop their! According to a CNBC article “The latest round was oversubscribed, the CEO said. He turned down an offer of $200 million at a $2 billion valuation from a single investor because he considered the terms onerous, according to Gurle.
1.3% Market Penetration
Symphony can be called “the poor mans Bloomberg” as they charge roughly $240 for an annual subscription compared to rather pricey $24,000 that Bloomberg offers their Bloomberg Terminal so on that bases the user base of 435,000 at $240 users only makes for $104,400,000 (In a recent interview Mr Gurle claimed only $60 million in revenues) while Bloomberg’s user base of 325,000 at $24,000 a year makes for $7,800,000,000. Based on this very rough translation it would seem they have only penetrated 1.3% of Bloomberg’s market dominance.
Words From CEO
“We should be break-even sometime in 2021.”
This push back comes in a time where IPO’s haven’t exactly been performing well despite very few names and a very public meltdown of WeWork (now WE) and an extremely inflated valuation.
“This is not a return-driven investment for them”
These might not be the words investors want to hear as if we’re honest that is exactly why investors buy shares of a company. The CEO claims that they’re also targeting smaller start ups that can’t afford expensive products like Bloomberg’s Terminal.