Breakingviews - Capital Calls: Trustpilot’s trust issue

A person types on a laptop computer in Manhattan, New York City, U.S., September 11, 2020.

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TRUST FUND. Trustpilot is giving investors a chance to review its own business model. The Copenhagen-based online review platform on Monday submitted an intention to float on the London stock exchange. It makes money by selling subscriptions to businesses, who can use reviews by consumers of their enterprises in their marketing materials and to gain insights via data analytics. In 2020, Trustpilot had 19,500 subscribed clients paying an average contract value of about $5,600. The subscription model marks it out from review websites Tripadvisor and Yelp, which focus more on advertisement revenue.

With 120 million customer reviews of over 529,000 websites in 2020, Trustpilot’s revenue surged 25% year-on-year to $102 million. With almost no debt, a mooted 1 billion pound valuation would mean it trades on 14 times sales. That’s in line with the average of listed U.S. rivals HubSpot and Tripadvisor. Yet growth in Trustpilot slowed in 2020 compared to a year before, it made a pre-tax loss of $12.9 million, and it has had issues before with fake reviews. It shouldn’t count on investors’ feedback becoming a lot more glowing. (By Karen Kwok)


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