Yesterday afternoon, SEO Twitter was abuzz with the news that SEMRush had filed to go public. Some great initial analysis on the numbers in this thread by Dan Barker:
SEMrush, the SEO tool, has filed to go public. Here’s the S-1: https://t.co/i1meSHts4Y
They spent $54 million on marketing last year, for revenue of $125 million.
(gross profit $95m, net loss $7m) pic.twitter.com/iz5nybcwfA
— dan barker (@danbarker) March 1, 2021
With some interesting competitor guesstimates by Mr. Rand Fishkin:
Really impressive what they’ve done the last 6 years.
SEMRush went from 3rd/4th place in SEO software, to a clear #1 in revenue & growth rate.
Ahrefs is #2 at ~$55-75M, with Moz in 3rd (~$45M)* at a slower growth rate (after leading for years prior).
*those are guesses, BTW https://t.co/87ieR3RvW8
— Rand Fishkin (@randfish) March 2, 2021
I know all of you are girding your loins for the Page Experience Update, but the SEMRush IPO will perhaps have a much bigger impact on many SEO lives than yet another algorithmic belch from Google.
If memory serves, the last B2B business that went public that came even close to serving the SEO industry was Yext in 2017. And Yext’s SEOness was tangential to its core offerings at best. There have been plenty of businesses that have gone public lately that rely on SEO – DoorDash, AirBnB, etc. But it’s odd that given how dominant Google is in our economy, that SEO is seen by the investor community as a mere pitiful remora, sucking up an endless discharge of crumbs from Google’s over-stuffed mouth.
About a year ago, an old friend, a Wall Street big shot, called because SEMRush was talking to him about potentially becoming their new CFO. He asked what I thought of the company. My take back then was that they seemed pretty focused on becoming the biggest thing in Search and he should take a serious look at the job. He responded that the whole thing seemed kind of “low rent”. I enjoyed DM’ing him a link to their S-1. Maybe now SEO-related businesses will finally get some damn respect from the investing public?
At a minimum, I’d wager SEMRush is finally getting some respect from the other SEO tool co’s. The Slack channels at Bright Edge, Conductor, Ahrefs, Moz, Botify, On Crawl, Deep Crawl, Sistrix, Majestic, etc. are all likely on fire at the moment. Actually what am I saying? Majestic is for sure using Microsoft Teams.
This is going to be the popcorn event of the SEO world.
— Andrew Shotland (@localseoguide) March 1, 2021
We SEO types have an overdeveloped sense of our importance in the Internet economy. If not for us, none of these fucking businesses would make it right? We’re just like doctors, always complaining about the patient who won’t lay off the Cheez-Its, and always responsible for extending said patient’s life so he can spend it eating more Cheez-Its. We are Unicorn shepherds, yet we often watch them ride off into the public markets without us. Yet as a group we all feel like one of these days we are going to hit it Justin-Timberlake-as-Sean-Parker big, maybe by osmosis or something.
So imagine all of these “Big Data” SEO Tool co’s, whose likely primary focus has been to achieve Unicorn trajectory, watching the first one make it over the wall. The question is will SEMRush make it out bathed in glory or in pig shit?
I don’t know about you, but I sense some panic among this group. They have had a great ride sucking YUGE dollars out of corporate buyers, but lately I have noticed corporate buyers getting a bit stingy with their big tool budgets. Yet everyone of them seems to have an SEMRush account on their company credit card.
So let’s say SEMRush pops out of the gate. If you’re one of the other guys, I think you’ll want to scale up as quickly as possible so you can take your shot. And that could mean M&A with one of the other guys.
Out of the co’s I’ve listed, like Rand I’d guess that Ahrefs is in the strongest position and its product is the most similar to SEMRush’s. But none of the other guys other than Moz or Sistrix have a model that would make a good fit IMO. And if Moz’ growth has stalled out (no idea if it has), then it might make a tempting target, just to acquire the customer base, and its storied brand of course.
But then I think about the tools with bigger price tags like Bright Edge and Botify. I wouldn’t be surprised if they are being forced to go down market. There are only so many eight-figure SEO budgets to go around after all. Those sales forces are expensive, and no one is taking anyone out for a steak dinner these days, unless, of course, Gavin Newsom is in the market for an SEO tool. So perhaps some consolidation occurs in this tier too.
And what if SEMRush tanks? Well let’s just say the race to profitability will have a “hair on fire” kind of quality to it.
Perhaps the most interesting part of this whole scenario is what SEMRush’s IPO will do to our collective SEO psyche. If it hits it big, we will all be buoyed by the temporary high of knowing someday that could be us. The even better news is that if it screws the pooch (and I certainly hope it doesn’t), most of us will all be fine lighting our cigarettes off its smoldering remains and getting back to work saving our client’s collective asses with a few well chosen Keyword Magic reports.
This news is so fresh that there currently are no PAAs in the SERPs for the query “SEMRush IPO” so check back here next week when I add some Q&A like “When Is The SEMRush IPO?” and “What Is The SEMRush IPO Price” and maybe even “How Do You Pronounce SEMRush?” for the semantic entity je ne sais quoi.
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