Hey, I'm Dan! I invest in startups at Madrona and write the DL, a weekly newsletter about tech in the Pacific Northwest

Featured Posts

Find Stuff

Built with Webflow

V1 Guide to Marketplaces

Version One, a Vancouver-based VC, published the third edition of their Guide to Marketplaces, last week, and it’s a fantastic resource for anyone interested in building and investing in marketplace businesses.


Here are some of the highlights from their full guide:

  • eBay (1995) started the first wave of product marketplaces, and Uber (2010) started the second wave of services marketplaces
  • Now VCs are investing in the third wave of marketplaces which include managed marketplaces, community-driven marketplaces, B2B marketplaces, and decentralized marketplaces
  • According to a16z, the top four private marketplaces account for 76% of total marketplace transaction value
  • Key strategies for scaling a marketplace include (1) focus on trust and safety, (2) support “power sellers” who make a living on your marketplace, and (3) develop a partner ecosystem
  • Here are all of the KPIs and metrics Version One uses to evaluate and track marketplace businesses
  • Marketplace valuations converge at 1x GMV or 6-8x revenue (about the same thing if you assume a ~15% take rate)
  • Here’s a “funding napkin” explaining what investors want to see at the Seed, Series A, and Series B for marketplace startups


Liked this article? Sign up for the DL, my weekly newsletter 📬

Thank you! You'll receive your first issue of the DL on Monday!
If you want to check out older issues - click here for the archives.
Oops! Something went wrong while submitting the form.