How much is an online supermarket like the British Ocado worth, when they can raise revenues of 427 million pounds (2009) but can barely turn a profit?
In the run up to a planned IPO, last week’s proclaimed valuation of over a billion pounds met with a healthy amount of scepticism:
"Its proposed valuation range, with a midpoint of 1.18 billion pounds including the proposed fundraising, was greeted with scepticism by analysts and investors alike.
Shore Capital analyst Clive Black said the maximum value he would ascribe to Ocado was 534 million pounds, while Arden Partners' Nick Bubb also urged the firm to lower its sights."They are asking far too high a price," a fund manager from a major investment house told Reuters on condition of anonymity."
One of the most damaging reviews came from Moneyweek. Some other analysts are seeing a fair valuation at 560 million pounds. Ocado is naturally convinced otherwise. Other reports indicate that a market value of 800 million pounds could be in the making.
This debate is particularly interesting because the valuation of e-commerce firms working in low margin segments is already fairly well documented. Recently, Buy.com went to Rakuten for $250 million.
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