Investment firm Battery Ventures has launched a new index to track the stock performance of prominent consumer-marketplace companies, businesses that are becoming more and more embedded into the daily lives of consumers, and, increasingly, driving a new wave of initial-public stock offerings.
The Battery Marketplace Index includes 39 companies that serve as online hubs where buyers and sellers meet. They operate in sectors ranging from ride sharing (Uber, Lyft), to food delivery (Grubhub, Delivery Hero), to travel and lodging (Expedia, TripAdvisor and Ctrip) to e-commerce (Wayfair*, eBay and Mercado Libre). To be included, the companies must be listed on one of the major global stock exchanges and boast a market capitalisation of USDF500 million or more.
The index is designed to grow as more prominent marketplace companies mature and go public.
“Marketplaces are becoming deeply embedded in all aspects of our lives, from how we get from place to place, how we eat, travel, and shop, and even how we buy a home or hire a babysitter,” says Roger Lee, a Battery general partner. “The companies are also generating an impressive amount of market value: The marketplace companies in our index are worth roughly USD1 trillion, and we estimate that could rise to $1.3 trillion** in the next 18 months as more companies go public.”
Research conducted by Lee and his team found that the stocks of the companies in the index have together risen by 594 per cent in the last ten years, as of 21 June, and also outperformed the Nasdaq Composite Index by 239 per cent in that same period.
Battery’s index evolved from a previous “Network Effect Index” the firm rolled out in 2017. That index included traditional consumer marketplaces as well as social networks, and focused more closely on businesses exhibiting network effects, meaning the services became more valuable the more people used them.
