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📱 springbig to merge with Tuatara Capital Acquisition Corp. (TCAC), $300M TEV
2021E Revenue of $24M implies 12.5x EV/2021E Revenue. Company has 1,000+ customers and LTM GMV of $7B+. Assuming no redemptions by TCAC shareholders and a $13M PIPE, springbig will have ~$200M cash.
The estimated post-transaction market cap. of the combined company is ~$500 million ($300M TEV after ($198M) in Net Cash), assuming $10 per share price and no redemptions by TCAC stockholders. Additionally, a $13 million PIPE investment has commitments from Tuatara Capital and existing investors, including TVC Capital, Key Investment Partners, and springbig's Founder and CEO Jeffrey Harris. The transaction is expected to close in Q1 2022.
springbig is a leading provider in customer loyalty and text message communications solutions for cannabis retailers and cannabis brands. Founded in 2016/2017, springbig offers a single source of truth CRM that becomes the database of record for customers that captures key purchasing and behavioral data and seamlessly integrates with existing dispensary POS and eCommerce systems. The platform also develops custom cannabis loyalty software embedded with advanced marketing tools to retain customers and sends targeted automated and personalized SMS campaigns based on customer preferences and purchasing behavior.
1,000+ clients across the United States and Canada. More than 2,300 retail locations (average of 2.3 stores/customer), and over 41 million consumers enrolled in its B2B2C platform, through which more than 90 million transactions have been processed in the past twelve months with attributable GMV of over $7 billion.
Expected to be Acquisitive. Similar to Weedmaps, which went public through a SPAC and acquired Sprout (CRM and Marketing) back in September, springbig intends to be acquisitive, citing a “robust pipeline of multiple potentially actionable M&A targets across various verticals.”
Scaled Software Platform Providing CRM and Marketing for Cannabis Retailers. TCAC believes that springbig has a $26B TAM (size of 2021E U.S. Cannabis Retail Market Size, source: New Frontier Data as of December 2020), growing at 20%+ CAGR. The company touts a 128% Net Dollar Retention (calculated as the average recurring monthly subscription revenue adjusted for losses, increases and decreases in monthly subscriptions during the prior twelve months divided by the average recurring monthly subscription revenue over the prior twelve-month period) for FY2020.
Attractive Valuation Relative to Peers (Median). TCAC is using a EV/2023E Revenue Multiple of 4.7x which is slightly higher than the Cannabis Software (Weedmaps, Leafly) comps at 4.2x and discounted vs. Marketing/Customer Engagement (17.2x), Commerce/POS (16.2x), SaaS (15.9x)/
Financials. 58% Revenue Growth (2021E vs. 2020A), 73% GM, (15%) EBITDA Margin.
👋 Highly Objective is written by Dai Truong. Third-party information presented here and links to third-party content are for informational purposes only and are not intended as a recommendation, offer or solicitation for the purchase or sale of any financial instrument, security or investment. The information provided is not warranted as to completeness or accuracy and is subject to change without notice. Linking to third-party sites in no way implies an endorsement or affiliation of any kind between Arlington Capital Advisors, LLC, or its affiliates and any third party. The information in this blog constitutes my own opinions (and any opinions posted by guest bloggers from time to time) and it should not be regarded as a description of services provided by Arlington Capital Advisors, LLC or any affiliate.