Wow huge round for 7,000 users, but I think I missed something. The plans range from $14 to $293/month and then there is an enterpise plan. If we say the average revenue/user is $100/month that would be $700,000 in revenue/month * 12 = $1.14M/year? Pretty impressive for 7,000 users, however, with 200 employees the burn rate is $10M/year?
Despite that the valuation is $200M, what did I miss?
$700k/mo * 12 = $8.4M/year (not $1.14M). So they're nearing profitability, have triple-digit per year growth, and the latest investors get liquidation preference that limits their downside.
A sorry for the miscalculation, did that on the way out the door.
Just thinking how big the market is. According to https://www.quantcast.com/top-sites/US?jump-to=110000 there are 110,000 sites with >10k monthly visitors, so I think that's the market of which they probably can get 30k users max for which they can charge $100/month on average: 30,000 $10012 = $36M/year revenue.
So for web, that's the cap it seems. According to http://www.appbrain.com/stats/android-app-downloads, there are 200,000 Android apps that have >100,000 downloads, which probably equates to 10k monthly active users, with iOS apps that's 400,000. So this will probably bring another $72M/year making it $108M revenue cap for Optimizely. So looks like the money for Optimizely is in the app market.
With 300 employees at max that's a burn rate of $15M + $25M marketing + $10M other costs, we got a profit of $58M = maybe $700M company, not bad.
Back of the envelope calculation, probably totally wrong, ok now back to work :)
I am involved in two websites that get a lot more than 10k visitors / month. Neither are listed in Quantcast. Using (crummy) traffic estimates based on Alexa ranks, I'd wager that there are at least 600,000 websites that would qualify for your >10k monthly visitors mark.
But I suppose it's all a moot point: They convinced at least one VC to invest, and that's all that matters. (Having used their product in the past, I probably would've invested too given the opportunity. Their product is pretty slick and saves a lot of time compared building your own A/B testing framework.)
Enterprise plans go well into 4 digit/mo territory (I'm an enterprise customer.) These plans are based on visitors, and they also have custom targeting to specific locations.
Rather than starting with an assumption on avg revenue per user, start with the valuation, figure out what that would imply about revenue/revenue growth, and you'll probably learn something about their likely avg revenue per user (i.e. it's a lot higher than your estimate).
I'm guessing a meaningful percentage of the companies interested in an A/B testing service like theirs (e.g. online retailers) are over 200k monthly visitors and are on the $400/month plan, if not an enterprise plan.
Despite that the valuation is $200M, what did I miss?