Video Platform SesameVault Up For Sale On eBay: Won’t Get Bought
This morning, after failing to raise an additional round of funding, Open Box Technologies announced they were putting the company up for sale on eBay with a starting price of $500,000. Included in the auction is their SesameVault video platform which does have some value, but not at the price they are looking for. Even if the starting price is matched, that won't meet the company's reserve price which is not being disclosed.
Last year, I used the SesameVault platform and gave it a quick run-through and while it did have a lot of nice features and seemed to work fairly well, it was very limited in its functionality. That's not to say that it would not be worth something to someone, but considering the company has raised $2.5M to date in funding and has a reserve price of over half a million dollars, I think they are simply being unrealistic in how much money they think they can get back.
While the company wont say how much revenue they have unless you sign an NDA, they did say they have over 100 paying customers. With SesameVault's pricing starting at $49 a month, even if all of their customers take their "most popular plan" at $199 a month, we're only talking about $20k a month in revenue or roughly $250,000 a year. That's not a lot of revenue. And when companies like this get bought, it's not uncommon for 50% of their customers to immediately leave, which means you really can't count on the revenue as one of the reasons for buying the company. While the company said that they, "don't imagine many will jump ship; more likely one of our competitors will try and poach them," if a competitor poaches them, that means they did jump ship. So no one is going to acquire the company for the revenue since it's anything but guaranteed.
When I asked the company more details on why a private sale to a CDN didn't take place, they did say that, "two potential CDNs contacted us in Q409 regarding an exclusive relationship (not necessarily an immediate acquisition). The interest expressed by these companies combined with the difficulties we were experiencing on the fundraising front played a large part in our decision to sell." While I would image there are some CDNs that would be interested in the company, at the price they are asking, it simply won't sell. If they were to put a price on the SesameVault platform and technology and it was realistic, I think they could sell it pretty fast. But considering their starting price is already so high and does not even meet their reserve, all based on revenue that can't be guaranteed, I don't see the company even getting sold at this price.