The valuation seems high to me. I've been told that valuations should be around 3.5x revenue; at $615m, that should mean that DSC has sold $175m of razors last year. I would be astounded if that were the case.
Note that there is not any rough revenue multiple that would apply in a broadly formulaic way for early-stage companies. They are all unique to some extent along axes that matter to investors (addressable market, growth rate, competition, etc.).
However, a couple of numbers from TFA might support the notion that DSC did ~$175m last year:
"“We have 2 million members that get a shipment every month or every other month"
...
"On average, the company’s customers pay a subscription fee of about $7 per month"
If those are both accurate, that's a $168mm run rate. (Right, that's not TTM, but if the company is growing rapidly, investors will want to have more of a forward bias and so TTM becomes less relevant.)
They do offer shaving cream, shaving butter, aftershave, hair products and moist butt wipes, allegedly that's where growth will be coming from - all the various products they can pack into a box and ship to customer's door on recurring basis.
where did you hear that 3.5x number? I thought 10x revenue was common for internet companies. Although this isn't an internet company, but they did get their start on the internet (I think?)
The short cut is to compacte with other players in the same industry. Somewhere else in the thread it's said that Gilette is valued 2,5x. So 3,5x is not too far off.
The real way investment managers calculate potential worth is much more complex, calculating expenditures per dollar earned, looking at the market saturation, risks from competitors etc. Because these calculations are usually the same for businesses in the same industry the shortcut is usually close.
In this case their multiplier might be higher than that of Gilette because they spend less on marketing and they're smaller but with a steeper growth curve.
