Photo: sliverfox09 via flickr
is morning, accounting software company Intuit bought Demandforce for $423.5 million in cash.Intuit is best known for its small business accounting and personal finance software like Quickbooks and Quicken, but it’s branched out into a wide variety of other products for businesses. It even has a Square competitor called GoPayment.
Its last big acquisition was personal finance advisory service Mint, which cost $170 million.
Demandforce makes software for small businesses to handle customer service and contact.
So Intuit paid only about 7x current revenues for the company.
In an environment where Facebook pays $1 billion (including cash and stock) for Instagram, a company with zero revenue, that looks like a bargain.
Of course, there are a lot of other considerations — Demandforce may not be growing anywhere near as fast as Instagram was, and Mark Zuckerberg was paranoid about Facebook losing its edge among teens.
But an 7x-revenues valuation is eminently reasonable.
This also matches what we’ve been hearing from nearly every VC and finance person we talk to: relatively speaking, B2B and enterprise startups are undervalued compared with consumer startups.