Online D2C brands grapple with moment of truth in the valuation game

Valuation demands of around 10x of revenue had become way too common despite the fact that consumer brands are fundamentally different from tech businesses.

For more than a year, online D2C start-ups have been seeking, and sometimes commanding, valuations like software start-ups. According to industry insiders, valuation demands of around 10x of revenue had become far too common despite the fact that consumer brands are fundamentally different from technology businesses.

But a course correction is happening now. “In the last two months, sanity has returned and the investor community is driving home the point that the best consumer brands can’t grow as fast as the best tech firms. It is that simple a reasoning,” says an investment banker who works with start-ups.

The founder