The higher valuation multiple for HoneyBook is attributed to its recent introduction of AI functionality, which aids users in pricing services and improving customer interactions. This AI capability leverages HoneyBook's data on small business operations to assist entrepreneurs in making strategic business decisions. Jeff Crowe of Norwest, a HoneyBook investor, believes that AI can significantly enhance the company's growth by helping solopreneurs, like photographers, who may lack the time or expertise to expand their businesses strategically. The expectation is that as HoneyBook's users grow their businesses, the startup will benefit from increased transaction volumes.
Key takeaways:
- HoneyBook, valued at $2.4 billion, reported $140 million in annualized recurring revenue (ARR), maintaining its valuation despite market cooling.
- The company offers business management software for independent service-based entrepreneurs and last raised $155 million in a Series E round from Tiger Global Management.
- HoneyBook's valuation multiple is about 17 times ARR, slightly higher than the median of 13 times for similar companies, justified by its new AI functionality.
- The AI feature helps users price services and make business decisions, potentially increasing transaction volume and revenue for HoneyBook.