Description

We believe Redbubble is poised to see a good deal of near-term catalysts and business model improvements and believe now represents an extremely attractive risk/reward investment.  Redbubble Group is the #1 digital marketplace for independent artists and is valued at 0.15x sales the business would be 5-10x the current valuation of 1-2x sales.  We believe that Redbubble is poised to return to both growth and profitability in 2H23 CY. If this is achieved, we think the stock would be revalued in the 1-2x sales range. We believe M&A supports 2x sales and public comps are materially higher than 0.15x sales. Redbubble is currently valued at roughly $110 million market cap with $40 million in net cash or $70 million EV with $470 million in revenue. We will explain why we see both as high-probability events. While laughable now, Redbubble believes that its business model at a steady state scale can achieve 13-18% EBITDA margins with CAPEX of 1-2% of revenue. Therefore if RBL hit the midpoint of its target at scale margins, RBL would generate $70.5 million in EBITDA or roughly 1x EV/EBITDA on the current revenue base.  During COVID RBL generated $55 million in operating cash flow in a single year and achieved a $1.6 billion market cap.  The current state of P&L was a misguided strategy of building a P&L for a business with $800 million in revenue vs. $470 million.  Much has changed over the last six weeks the return of the largest shareholder as CEO, a new strong CFO, and a May 1st business model improvements. The board and largest shareholder/CEO are laser-focused on profitability. We see a hidden asset in RBL subsidiary Teepublic as a significant hidden asset, recently disclosed information shows that Teepublic has grown revenue at +39% compounded annually from 2018 taking revenue from $35 million to $135 million, and grew revenue last year as well. We also believe Teepublic has decent economics as was profitable at the time of acquisition. Our opinion is that Teepublic's results were not disclosed until February '23, due to the little brother upstaging the big brother.  Teepublic is based out of NYC, sells mainly in the US, sells mainly apparel, and is very focused on quality content. This combination has allowed Teepublic to outgrow Redbubble going from 12% to roughly 30% of the Redbubble Group’s total revenue since 2018. Using recent M&A multiples for an industry-leading growth rate we think at 1.5x sales multiple + cash for Teepublic alone is +100% before valuing Redbubble. Redbubble holds significant value on many fronts as well especially now with the founder running the company as CEO. We estimate that Redbubble Group's (Redbubble + Teepublic) consumer-facing marketplaces have roughly several times that market share as the next pure play competitors such as Spreadshirt, Society6, or Zazzle. Leaf Group was acquired by Graham Holdings (GHM) for $270 million in cash or 1.4x sales which were 75% Society6 in terms of revenue and Zazzle a year ago hired Barclays-Citigroup (Kleiner-Perkins backed) to go public at a valuation of $1-2 billion which they pulled last summer (2-4x sales by our estimates, we believe a good chunk of this is bulk B2B orders vs. artist marketplace). According to Google Trends, Redbubble Group is roughly 2x the size of Zazzle and is currently valued at $70 million. Whatever the case, we believe RBL is worth substantially more than 0.15x sales for a business that two years ago had 7% EBIT margins. We believe that nearly all the damage done to RBL was a ramp in headcount but this is a content/platform take rate business that by simply right sizing head count can achieve significantly improved profitability from current levels. Another digital marketplace closed in January, Poshmark which sold for 2.2x EV/Sales or $840 million and was the same size in revenue as Redbubble. Poshmark had 15% top line growth but -21% EBITDA margins. Anyways, POSH transacted at 14.6x the current EV/sales multiple of Redbubble. Finally, we believe that Redbubble possesses deep competitive advantages that cannot be easily replicated by competitors which includes deployment of capital/incentives to the tune of $175 million per year, as well as zero cost artist acquisition, plus an 80 million design library that generates passive income to nearly 1 million global artists. 

Redbubble allows an artist to have a digital storefront that operates in 25+ countries and earns passive income. The artist uploads their design, sets on products they want to sell on up to 130 products, and Redbubble does the rest of managing traffic, platform, fulfillment/production, and shipping. Redbubble from an artist's perspective is a ZERO cost-free call option to generate passive income, as opposed time/cost/of both real estate and product of buying a table at a flea market, a pop-up store, or leasing a small retail store. The artist simply earns 20% on every sale, and Redbubble outsources the product to be produced to one of 45 regional fulfillment partners closest to the consumer to be shipped. All major digital marketplaces are now in the business of monetizing all sides of these digital marketplaces and Etsy charges sellers 7 fees including the cost to list an item on their. Fees serve to improve the business model on multiple levels including creating carrying costs to suppliers of content/products as well as enhancing the user experience. 

Despite appearances there is a real moat: Redbubble will cross paying out $500 million in royalties to their artist base since launch over the next 12 months and currently pays out $90 million per year to over 800,000 global artists. Over 70% of  RBL royalties have been paid out over just the last 36 months vs. 15 years in business.  Etsy went through this phase as well and entered the fee business which pretty much all marketplaces have done now: Etsy charges a listing fee, onsite ad fees to advertise/promote, off-site advertising of artist content then charges the artist on every sale for the ad costs.  RBL is now spending $175 million that Redbubble spends between direct marketing and royalties paid to artists which is a significant moat in creating liquidity for consumers, artists, and fulfillment partners. RBL has 10 buyers for every seller and Etsy has 20x. As Redbubble continues to spend more and develop their new artists tiering and use of AI to manage their content library we think the reach of $175 million a year spends a year will allow RBL to grow with better profitability. Redbubble Group's reach and competitive advantages are significant compared to Spreadshirt, Zazzle, and Society6 as well as smaller players.  We think it is very early days in the company's growth trajectory as more products, artists, consumers, and fulfillment partners join and it all comes down to platform, people, and capital to reach the audiences. 

Content Library: 80 million

Products: 130 

Annual Visits: 400+ million with 2.5% conversion

Royalties: $90 million per year

Reach= $175 million per year from $85 million in direct marketing + $90 million in royalties 

Fulfillment partners: 45 

RBL App Reviews: 4x Zazzle and 20x S6

Revenue $470 million 

Below: Teepublic 2018 $35 million in revenue to $135 million +/- currently 

Redbubble is a digital e-commerce platform for independent artists. A $1 in sales gets split roughly speaking: .20 cents to the artist, .45 cents to the product to be produced/shipped known as fulfillment partners, and .35 cents to Redbubble the platform owner. Redbubble has a large content library of 80 million designs which is the largest in the industry by a wide margin. We think over time, RBL can run a 25-30% Gross Profit after Paid Acquisition margin (from the current 23%)  but even in the 20% range, they have been able to generate + EBITDA. It takes time to upload each image and the content is usually evergreen (RBL discloses content sales by year uploaded). RBL is different than an e-commerce company as the model RBL has a take rate (doesn’t carry inventory) on each transaction which is like the business models of DoorDash, Shopify, Uber, or Etsy. What is different is there are three sides to the platform to potentially monetize: Artists (earn $90 million a year), Consumers (spend $470 million a year), Fulfillment partners (charge Redbubble $200 million a year), as well as separately OPEX ($130 million a year).

Like most Digital Marketplaces....the business is a very capital-light model with a mini "float" given that RBL collects cash faster than they pay it out to suppliers. 

Redbubble has seen a -95% valuation contraction since Jan 2021-May 2023 falling from $7.00 to .40 cents a share, June is the FY end and the company is poised to grow going forward starting in July '23. Redbubble has grown from $12 million in 2012 to roughly 40x this or $470 million for June year end. Usually convervatism is preferred in Australia and given the drop in RBL the sell side is not looking to stick their neck out on the line and they still have +7% revenue growth starting in July (which includes Goldman Sachs & Canaccord)

This write-up will focus on 4 key points.

1^st: New/Old Leadership Track Records at Redbubble: On March 27th Martin Hosking the largest shareholder, former CEO, and co-founder owning 15% of the company took over as CEO for “the foreseeable future.” Additionally, on March 27^th Redbubble added Rob Doyle who left a $2.3 billion public company (Domain Holdings DHX.AX) to join RBL (1/30^th the size of DHX in market cap, altough RBL revenue is 30% higher than DHX). Martin led the company in several phases a) as a start-up with the first capital raise of $5 million as a private company to leaving as CEO of a public company in August 2019 with a $250 million market cap then came back for stint two Feb 2020 from $250 million to $1.6 billion market cap in Jan 2021. As CEO Martin track record at RBL: grown revenue at +39% compound annual revenue growth, +40% CAGR gross profit, and generated roughly $85 million in cash or the entire current enterprise value or the current enterprise value. As a public CEO Martin’s valuation averaged 2.0x sales and the current valuation is 1/10^th this now. Martin is largely responsible for building Redbubble into what is the dominant marketplace for independent artists with roughly 9 million annual consumer purchases and close to 1 million artists. Other new additions include the CTO from REA and head of Product from REA which is a $15 billion publicly traded digital marketplace in AU, as well as the CMO of Wayfair as a director (who is responsible for a $1.7 billion annual customer acquisition budget).  

2^nd: Business Model Enhancements: On May 1st Redbubble implemented key business model changes to what we believe will substantially improve the artist/consumer experience as well as be a driver of revenue/profits. Redbubble algorithm ranks artists across multiple factors and ranks them as either a) Standard B) Premium or C) Pro. We think this makes a lot of sense and will add to profitability by at least $15 million per year (40% royality clawback from standard artists). Additionally, Redbubble has already implemented AI to improve its search results and is looking to deploy to its entire content library of 80 million designs later in ’23.

3rd: Real Moat:  Over the next year Redbubble will cross paying out to their artist base $500 million since launching. Redbubble effectively has a salesforce of 800,000 that earns roughly $90 million a year only in commissions and Redbubble spends another $85 million out of pocket on direct marketing or $175 million which we believe is larger than most competitor's total revenue.  

4^th: Catalysts We believe RBL has a super fixable issue; OPEX is up +80% and revenue -30% from the COVID peak which has achieved the current cash burn. Effectively the OPEX was geared for $800 vs. $470 million in revenue. Martin's track record is clear: He has generally been able to deliver on both revenue growth and cash flow. The combination of new CEO/CFO + model changes + guidance to sustainable free cash flow and sell-side with +7% revenue growth suggests the odds that RBL is revalued at significantly higher than 0.2x sales given M&A multiples and public comps. If RBL, hit just a 5% EBITDA margin RBL at 3x EV/EBITDA. Even a group of very pessimistic sell-side analysts covering RBL have started in July +7% top-line growth starting for July 2023 (to $500 million in revenue) and company guidance to steady state free cash flow 2^nd half calendar year 2023. We think it is likely to see both a return to profitability and revenue growth with the team and changes to the business model which we think could lead over the next 12 months back to 1-2x sales valuation. In January, Poshmark was closed and was acquired for 2.2x sales and was the exact same size as RBL but losing more money. Martin has a long track record as CEO of RBL and 

Our thesis:

Like most digital marketplaces they are very hard to build and are winner take most market structures. Redbubble is poised to be by a wide margin the deepest liquidity provider across key metrics such as content (80 million designs), artists (1 million), effective marketing reach ($175 million per year), fulfillment network (45 global fulfillment partners $250 million+), and consumers ($470 million in revenue, with 9 million annual transactions). All of these points matter and most are hard to replicate. 

Redbubble largest vertical is in apparel and to give perspective in aggregate revenue prints roughly 8% of custom t-shirts in North America or just under $200 million in USD annually or about 10 million t-shirts. Redbubble is in 130 product categories with 80 million designs in its content library that create over 4 billion product combinations. We think RBL has attractive growth opportunities in other categories like pets and phone cases. 

As shown above: Martin Hosking as-> 2.0x sales (from 2016-August 2019) vs. w/o well CEO 1 (see star above): 1.7x sales to 0.5x and CEO 2(see lightning bolt above): 3x to 0.18x (hard to believe but true). It’s not some random outcome, Martin is laser-focused on making money as his track record supports for many years pre-post IPO.

As shown below Redbubble, has rarely not generated + cash flow until trying to ramp up growth bets far into the future....additionally, RBL revenue is up nearly 40x on the chart below since 2012

Founder’s Interview after taking back the CEO role in March ’23:

“Our unit economics are strong, and so it’s really a question of making sure that our cost base is aligned with our revenue,” said Hosking.

The company as a group is by far and away the largest marketplace for independent artists, but it does have competition such as US-based Zazzle and a German-founded company called Spreadshirt.

At the peak of Covid in 2021, the RBL share price reached as high as $7.04 but Hosking is adamant that he’s not in the business of predicting future share prices.

“It’s a game which I think I will only ever lose, so the only thing I can control is our business performance economics,” he said.

“The advantage we have as a company is we’ve got a business that operates and covers different segments.”

“We’ve also got a dominant position in a global marketplace, and I believe it’s a good time to really have a serious look at us as an investment opportunity.”

https://stockhead.com.au/tech/bumpy-road-just-ahead-but-long-term-trends-intact-for-online-retailers-like-redbubble/

Is RBL investible as a US investor?

NOTE: I couldn't find RBL.AX so I wrote it up under RDBBY. 

Two options: ASX RBL.AX or listed in the US under: RDBBY.

RBL can be purchased in US under RDBBY (convertible into ASX listed shares, adjusted for currency at 1 US = 10 RBL on the ASX). Given the conversion feature of RDBBY the shares generally track daily to pricing on the ASX and are more liquid than it appears based on trading volumes. 

Management & Board Additions: 

We believe that Redbubble has both strong human capital and now strong owner/operator/founder with track record of success leading the company with a very good CFO.

Redbubble new hires came from: Etsy, Target Digital, eBay, Amazon, Uber, REA, Domain Holdings, and SEEK.

• March: Martin returns as CEO for the “foreseeable future” and owns 15% of the company and has compounded the top line out at +40% as an operator and generated a good deal of cash. From founding at first raise $5 million and exited as public CEO at $250 million and second run was $100 million to $1.6 billion.
• December: Domain Holdings CFO Robert Doyle leaves (DHX.AU)a $2.3 billion publicly traded to join Redbubble as CFO in March 2023 a $70 million EV.
• November 1^st  Redbubble adds new director ->Chief Marketing Officer of Wayfair. Bob manages a $1.7 billion marketing budget and generates roughly $12 billion in annual sales: -> https://www.linkedin.com/in/bob-sherwin-9451501/ 
• Director of Data & Insights, previously Head of Product at REA, which is a $15 billion public company in AU

https://www.linkedin.com/in/simondelloro/

• Director of Software Engineering RBL, previously Principal Software Engineer for EnergyAustralia, which was acquired for $2 billion.-> https://www.linkedin.com/in/bsmithb2/
• VP- ESG previously spent six years at Amazon Human-centered research/science programs, people experience/technology/risk management.-> https://www.linkedin.com/in/mike-mathieu-9387a913/

• VP of Growth Marketing, formerly at ETSY, and Consumer Marketing & Director Digital Marketing at Target https://www.linkedin.com/in/patrick-reiter/
• CTO- 8 years at REA $15 billion market cap, executive manager of Engineering https://www.linkedin.com/in/siebert-lubbe-aa60684/

•  Chief Product Officer: Executive GM at Xero, which is a$2 billion public company, CPO at SEEK, which is a $7 billion public company https://www.linkedin.com/in/nicole-brolan-8665599/  

• VP Artist & Content: Former UBER GM for AU/NZ as Head of Marketplace and Delivery Partner Operations

 https://www.linkedin.com/in/tkaipert/

• VP- Brand Growth Chief Creative Officer of North America eBay -> https://www.linkedin.com/in/reneeblake23/

Despite Appearances in valuation there is a real Moat

• As explained earlier: Redbubble effectively has a commissioned sales force of 800,000 that earn $90 million a year from Redbubble payment in royalties. Over the next 12 months, Redbubble should cross the $500 million payment in royalties to their artist base since they launched. This incentive structure from a global artist base is a powerful moat.
• Redbubble effective reach would require roughly $175 million in capital which leads to about 400+ million annual visits with a 2.5% conversion rate.
• Redbubble has about market share based on traffic several times that of competitors (Spreadshirt, Zazzle, Society6). Redbubble group’s (Redbubble + Teepublic) traffic equals that of a 85 score with the next closest competitor Zazzle at 42 (see below)

• Also shown above in cash conversion table: Redbubble has bargaining leverage with their suppliers which effectively creates a “float” with a cash conversion cycle of -20 days as the business operates largely w/o inventory and very limited A/R.
• We estimate that Redbubble paid commissions are about 2x the next closest pure-play digital marketplace revenue base
• To compete with RBL requires a) 60 million+ image content library b) an artist base of 800,000 c) royalties + direct marketing of $170 million a year that drives 400 million page views with a 2.5% conversion rate. There is no mass uploading of images, each of the 60 million designs needs to be set to print correctly.
• Redbubble operating expenses in human capital are a considerable $130 million a year. The answer might be so what, but Redbubble has a good deal of impressive human capital FWIW that we think with appropriate strategy and leadership can unlock a lot value (more later on this). RBL is investing in artist tiering systems, already deployed AI to improve search and management of their content library and looking for a full rollout by year-end, and finally RBL App has 94,000 reviews some competitors lack even an app...Zazzle has 24,000 reviews and S6 under 4,300. 
• As the industry leader, Redbubble does not pay to acquire artists or content.

New Revenue Stream

May 1^st -> Redbubble launch a new Artist Tiering system that will claw back to lower quality artists and reward higher quality Artists based on three tiers: a) Standard B) Premium C) Pro. Redbubble has created an algorithm that ranks the artists on 10+ value drivers to the network the obvious: revenue generated, site traffic, following listing standards and guidelines, linking to their storefronts on social media, uploading to designs, managing their Redbubble store and communication with buyers. There are significant benefits to being in the Premium or Pro categories and significant disincentives for being in the standard category (40% royalty clawback). We think this a great idea, add value or leave and 85%+ of the value of RBL is out of mainly the Premium/Pro categories. We believe the effectiveness will be not only recapturing royalties from laggards/detractors, but more importantly best selling artists will sell better and increase consumer transactions.

Etsy has a ratio of buyers/sellers of 20x vs. RBL of about 10x. Etsy and other marketplaces were able to flip a switch and grow at accelerated rates by aiding marketing efforts to their best artists/content through paid search on and off site as well as fees to incentivize quality content. This effectively allows better artists to sell more while raising the bar for the lowest quality content by creating increased carrying costs vs. free shots on goal.

Inverting what hurt Redbubble's business was COVID-driven content + NOT having tiers/carrying costs saw content low-value content grow significantly which is now being cleaned up (especially with Artist Tiers and we will see with AI initiative). What is more interesting is that Teepublic DID NOT do this and their content library is literally zero growth since 2020 and worked well.….therefore it makes sense to implement tiers now to reduce content and non-contributors to the site. Or picture our Value Investors Club (VIC) not having the requirements to submit two ideas and taking all college finance grads. While ideas/content would spike it would be hard to discern quality from quantity. VIC owners would either flip back to current system or charge a submission fee of $100 per idea for the chance to win $5000. Nearly all digital marketplaces have to deal w/ this issue. Nearly all digital marketplaces in the fee business monetize both the consumer and content provider at scale. This happens with ETSY, SHOP, and others that implemented fees and it worked.

Case Study: A) Redbubble Subsidiary Teepublic +39% CAGR from $35 to $135 million which has FAR surpassed Redbubble even though they are one company. Redbubble has adopted a lot of the key learnings from Teepublic... 

Redbubble AI Initiative

Redbubble is rolling out AI to screen all content and get rid/reduce the use of artist-generated hash tags. RBL has tested AI search on several thousand images for search results that AI can screen through images and identify what consumers are searching for. The AI initiative working as anticipated, and the company intends to roll out the entire 65 million design/content library by year end. We think this will have a very positive impact on search results vs. current system of artist hash tags/other signals (drop down to search relevant, popular, etc).

Valuations w Multiple Expansion:

On current revenue base: $470 +/-

• 5% EBITDA margins = >3x EV/EBITDA
• 10% EBITDA margins = 1.5x EV/EBITDA
• RBL guidance to targeted at scale 13-18% - under 1x EV/EBITDA

It is not hard to believe that RBL could target these ranges, as taking OPEX from $65 million to $140 million and losing 30% of revenue got the business to -$25 million in EBITDA. This is a platform business that has proven it can scale up rapidly w/o people and make $....as revenue grew from $300 million to a peak of $600 million during COVID and generated a decent amount of cash. 

Hierarchy of love/hate e-commerce & digital marketplace valuations:

• Beyond Hated!; RBL is today at 0.15x EV/SLS (Where Redbubble is currently valued as, #1 industry leader, with 35-40% of the market cap in net cash, and guidance for steady state profits within 6 months or sooner)
• Terrible 0.4x EV/sales =  RBL .80 or +100% 
• Bad 0.5x sales= RBL $1.00 or +150% 
• Okay 0.8x sales = (Currently where levered Delta Apparel (DLA) t-shirt retailer with $159 million in net debt but also owns fulfillment business, and ASX listed e-commerce retailer Kogan are valued with -25% revenue contraction this year)
• Fair:1x Sales = RBL at $1.84 per share RBL or +360% 
• Good 1.5x sales (where Leaf Group Sold of which 75% of the revenue was Redbubble Comp S6) = RBL +525% 
• Excellent 2.0x sales: RBL: 2x sales $960/280 shares $3.43 + .16 cents in cash = $3.60 per share or RBL =  +690%
• Poshmark (POSH) just closed in January at 2.2x EV/Sales, POSH is a digital marketplace for apparel with a takerate model as well. 
• Door Dash 2.2x sales 
• 4.7x EV/Sales = ETSY
• 13x EV/Sales = Shopify (SHOP) 

 We think there is a very high probability that RBL will appreciate significantly from the company's current valuation as shown above: We do not view 1-2x EV/sales for the industry leading platform as an unreasonable valuation.  

Feb '22: Zazzle $1-2 billion a year ago, at 2-4x sales. It is more like 1-2x sales or -50%. A lot b2b sales vs. consumer marketplace.

https://www.bloomberg.com/news/articles/2022-02-18/ecommerce-firm-zazzle-is-said-to-tap-citi-barclays-for-ipo

Spreadshirt has revenue of $198 million at the COVID peak and looks to now be about the size of Teepublic or $135-140 million in revenue (guess) based on that traffic is equal on google trends with TP. 

Redbubble Group revenue is roughly 4x Spreadshirt, 4x Leaf Group revenue, and 1.4x Zazzle is our guesstimate (Zazzle does a lot B2B business vs. consumer/artist marketplaces...we think the consumer marketplace is worthy of a far higher multiple giving lack of bulk discounts)

 Odds RBL trades higher/lower: 

As shown above: the public markets value a Redbubble like business not surprisingly at the bottom 10% of the peer universe. The above cohort of 222 companies for over $250 million in revenue, fixed asset turnover +4, and good balance sheet trades on average at 3.6x sales vs. RBL at 0.15x. Ironically, if went worse than -10% EBITDA margins this goes up to 5.5x sales and picks up Monday.com etc. The point is that 0.15x sales is exceptionally low for a scale digital marketplace. (as of 7 April 23).

 DISCLAIMER: This does not constitute a recommendation to buy or sell this stock. We own shares of the company, and we may buy shares or sell shares at any time w/o updating. 

Catalyst

The Year of Efficiency Comes to Redbubble Combined with: 

Exceedingly Cheap; 0.15x EV/Sales with 35-40% of market cap in net cash. Peers are valued at .8-3x + sales. 

Guiding to steady state profits in 2H23 

Hidden Asset: Subsidiary Teepubblic +39% CAGR revenue growth rate since 2018-> grew from $35 to $135 million going from 12% to 30% of total revenue. Was profitable at acquisition, grew last year as well, and smoked the parent company in success. Teepublic is NYC based and is likely worth 1.5x sales + cash = +100% just for Teepublic alone

Return of Owner-Operator as CEO: Martin Hosking (owns $16 million worth of stock or 15% of the company) returns as full-time CEO March 2023: As CEO Martin has grown revenue at +39% top-line growth compounded annual revenue growth, +40% compound annual gross profit growth, and generated the current EV in cash flow. As CEO Martin’s track record of success RBL has traded at roughly 2x sales as a public company vs. the current 0.15x. I have known Martin for 5 years, and he is massively uncomfortable not making money as he track record has shown over the last decade. 

Monetization Improvements with AI roll out to the content library on search, and Artist Tiers which will add to profits started May 1st

Further Cost Cuts:

Potential M&A: Zazzle, Etsy, eBay, Amazon, or another large digital marketplace RBL at 1-2x+  sales = 5-10x the current valuation.

Strong talent base from other large and successful digital marketplaces: Uber, Etsy, AMZN, Target, REA, and Wayfair

#1 global digital marketplace for independent artists-> Strong incentive structure w 800,000 global artists earning $90 million a year in Redbubble royalties + $85 million in direct marketing or reach of $175 million a year. We think as this continues to grow to north of $200 million the ratio of buyers/artists will increase from 10 to 1 to something more like ETSY at 20 to 1. More brand awareness, given effective reach.

Winner take most industry structure, like every other large scale digital marketplace they are very hard to build but at scale the moats are deep and businesses become significantly more valuable-> Etsy, DASH, SHOP, Ebay, etc

 We think there is a reasonable chance that RBL achieves both revenue growth and targeted margins to $600 million in 24 months with 13% EBITDA margins  which would equate to $78 million or the current enterprise value. If this occurs the stock would likely be closer to 15-20x from the current price assuming a 15x EBITDA multiple