Online marketplaces are typically valued by revenue, community engagement and potential. What is the company's current growth, what is the rate of growth, what is the market share potential, how it is the market, and what are the opportunities that the company affords. These all play a part in valuation. What is the reach? How many subscribers, users, etc all play a part
Online marketplaces are in fact platforms. In other words, they try to connect the one side (demand) with the other (supply).
Whether it's for a goods marketplace, like Amazon, a services marketplace like oDesk or a niche marketplace, like Clarity, the valuation follows pretty much the same rules.
Now, of course there are variations, depending on what the platform is marketing, the audience it has and the location it's based in, but here are a few of the key things that matter the most:
1) Growth, especially if it's a young startup
Combine this with churn rates and activity rates of course.
One of the key problems a marketplace faces is to keep both sides incentivised. The producers have to produce more, so value gets added to the platform.
Growth is the No.1 metric for a marketplace, as it happens with lots of startups in different niches.
This results to the attraction of the consumer side. So:
2) Activity of users
On both sides. In the case of a products' marketplace like, Etsy, if your producers are constantly posting new goods, chances are the consumers will be able to find what they are looking for, so the total value of the marketplace gets a boost
The ugly truth, especially when we are talking about fundraising valuations, is that venture capitalists want to see their money multiplied. Nothing else. They don't care if the marketplace is solving a huge social problem like no other or if it does this and that good to the world. Well, they may care about it, too.
But, what they care first and foremost is their money.
And the best way for a startup (and a marketplace) to prove it can deliver value to investors is its monetization metrics.
In general, their revenues of a marketplaces is calculated upon the gross of the total value of transactions it handles. The bigger the gross, the more the value of a marketplace.
An important fact here is that not all marketplaces are successful monetizing the transactions their users perform.