Published Date: 2021-06-07 | Source: INCE|Community | Author: The Finance Ghost
Over 100 million people visit Stack Overflow every month, making it one of the 50 most-visited websites in the world. That's valuable. Combined with a software-as-a-service (SaaS) business model, it's worth $1.8bn to be exact.
We know this because Stack Overflow caught the eye of Prosus, Naspers' offshore listed structure that has been an ongoing frustration for investors based on its stubborn discount to NAV.
Naspers and Prosus are in the middle of a spectacularly complicated deal to try and sort out the discount. Luckily, the Stack Overflow deal is a lot simpler, expected to close by Q3 2021 at a transaction value of approximately $1.8bn as previously mentioned.
Stack Overflow is focused on collaboration and learning within the tech community. There are 52 million questions and answers on the platform and 85% of its community visit the website every week.
In the online world, engagement creates value and Stack Overflow has it in, well, stacks.
The value-add from Prosus is to help scale the business, as Prosus operates businesses in over 90 countries. It's easy to promise that group companies will collaborate and cooperate with each other, so we will wait for the proof in the pudding.
As a reminder, Prosus owns the international businesses in the Naspers stable. This includes classifieds, food delivery, payments, fintech and edtech businesses in a number of critical emerging markets. The most important investment is of course the stake in Tencent, with the Prosus management team trying hard to create a group that is more than just a look-through into Tencent.
Prosus is worth $170bn, so this deal is around 1% of the group's market cap. It's difficult for any business of this size to find deals that genuinely move the dial.
Unfortunately, the revenue multiple for the deal was not publicly announced.