Last week I reviewed the companies I wrote about in the 1st half of 2019. Now let’s review the companies from the second half of the year.


Fiverr had it’s IPO in mid-June.  It went public at $21.00, opened at $26.00, and closed its first day up 90% at $39.90.  You can now buy the stock for almost exactly its offer price. At the time, I made no call on whether to buy the stock. I simply noted Fiverr had a much higher take rate and growth rate than its competitor, Upwork.  I suggested these two metrics bore watching.

In its first public quarter, Fiverr improved its take rate, though growth slowed a tad. The company provided guidance of 34-37% growth for the full year 2019, which is lower than its historical growth rate.


Most of the academic research suggests you are better off waiting and not buying IPO shares, as was the case with Fiverr.  On the other hand, some of my great misses came from following this advice! (Mastercard, Google, and Coupa come to mind.)

Change Healthcare

Change Healthcare went public in June at a price of $13.00 a share. It now trades at almost exactly the same price.  The company is large and highly profitable but is a slow grower, so it does not get my blood pumping.  Its history is, however, mandatory reading for any enterprise platform entrepreneur.


Phreesia went public in July at $18 per share and finished its first day up 40% to $26.75.  Since then the stock has rarely closed below that level.  It’s now near $29 per share.  Phreesia plays on the provider and patient intake side of the healthcare system which I know little about.  But, I do love that Phreesia has three revenue streams:  SaaS, payments, and advertising.  I’ll probably just continue to watch the stock move up the rest of my life.

Optal and GoCardless

In September, I wrote about Optal and GoCardless, two private UK payments companies taking the opposite approach to payments.  Optal is leveraging virtual cards.  As a result, Optal has low gross margins, but very low operating expenses.  GoCardless is trying to replace credit cards, so it has high gross margins, but much higher operating costs.  Since my post in September, both companies have made their 2018 financial results available.

Optal in 2018

Optal had a great 2018 and looks like a really, really nice business (that’s an understatement).  Here are the key stats:

  • GDV grew 52% to €16 Billion
  • Revenue grew by about the same percentage from about €200 million to €300 million.  This implies a gross take rate of about 1.9%.  Gross profit also grew 50% to €56 million, for a net take rate of 35 bps–similar to 2017’s take rate.
  • Operating income more than doubled to €38 million.

Putting it all together, Optal is a Rule of 60+ payments company showing operating leverage.  Wow.

GoCardless in 2018

GoCardless had an 80% gross margin in 2017, but the question I posed about the company was could the company tame its operating expenses while it grew?  The answer in 2018 was: not yet.   GoCardless’s key stats for 2018 were:

  • Payments volume grew 91% from £3.2 billion to £6.1 billion.
  • Revenue grew 69% from £11.9 to £20.1 million.  The slower growth of revenue versus payments manifested itself in a shrinking take rate from 37 bps in 2017 to 33 bps in 2018.
  • Unfortunately, administrative expenses were also up proportionately, such that the EBITDA loss for 2018 increased to £14.1 from a loss of £6.4 million.

Putting it all together, GoCardless moved farther from being a Rule of 40 company while Optal blew past this metric.

That’s it for the look back on companies I wrote about in 2019.  The speed at which enterprise platforms are being invested in, and therefore improving and growing, will make for an exciting 2020.

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