Expensify is too damn cheap
Crowded space, undifferentiated, tough macro, point solution that will get murdered, CEO is a nutcase snowflake. Yep, those are all probably true to some extent. After all, you don’t go dip below <3x forward when things are going well.
But lets talk about some of the positive aspects:
Expensify has no right to exist, yet it does. In fact, they’ve added 12 million members to its ecosystem since founding. Why? It solve an actual problem that the platforms cant seem to do well from a UX perspective. Scanning a receipt in a way that doesn’t feel “heavy”, intuitive approval workflow, better than average job at classification, tagging expenses to many GLs, integration to a wide variety of HR, travel and accounting systems, to name a few
The general sentiment when I speak to users is that they actually like using it. If you get a W-2 for a living, you know that expenses is a chore that just needs to be done. Rarely do you seen passion around a business application, but the overwhelming response from Expensify users is that they actually like it. Now, you can say, this isn’t a hard category to build/enhance. That’s true, but they arent doing it and haven’t done it. and When they do, it tends to be focused around their own ecosystem as an add on.
Virtual card and invoicing/billpay has real promise. Similar to BILL, its meant to be agnostic to the source/destination and form factor
Macro headwinds is a positive. I would argue poor macro/demand environment is the best time to be a buyer. Can it get worse? Of course. Can the multiples further contract? Sure. But we’re much much closer to the low range of the multiples and with an effectively cash flow sustaining profile, im not worried about sitting through it
Expensify is extremely cheap on an absolute and multiples basis. ~$500M / ~3x doesnt buy you much these days? What’s the comparable bin you get these days? Weave (one of my favorite longs 100% ago)? But lets be honest, the IP value in WEAV and addressable market is significantly lower. Best case scenario, we have a credible BILL competitor in which case the multiple 3-4X
The cultural issue is a real issue but i’d argue it only presents itself as a prohibitor of being acquired. I would be on management’s side w.r.t M&A, not a seller at this price point without a completely off-market multiple.
Just my 2 cents.