[HN Gopher] SEMrush S-1
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SEMrush S-1
Author : us0r
Score : 43 points
Date : 2021-03-02 18:28 UTC (4 hours ago)
(HTM) web link (www.sec.gov)
(TXT) w3m dump (www.sec.gov)
| melomal wrote:
| There's word out there that SEMRush is entangled with the Russian
| mafia. Literally everyone right now is getting in on this bubble.
| [deleted]
| tmpz22 wrote:
| Can people claiming success with this product provide just a
| little more context on how it helped your company? I always think
| there might be astroturfing with these kinds of submissions.
| nickff wrote:
| It's useful for figuring out how to optimize your site for
| 'organic reach', as well as for analyzing the relative
| popularity of your competitors.
|
| SEMRush can tell you how many people search a variety of terms,
| and what websites they're visiting after those searches. You
| can then use this to change the language (key phrases and the
| like) on your website, and write content (blog posts or landing
| pages) that fits with existing search user preferences.
|
| You can also pop a competitor, client, or supplier's website
| into SEMRush, and see how much they spend on ads, as well as
| how many people are finding their website via search. This can
| help you figure out what they're doing well, and where they do
| poorly. You might be able to rank for similar keywords, or go
| for keywords they aren't targeting.
| dcist wrote:
| A lot of SEO and digital marketing agencies use SEMrush because
| it's an easy way to track keyword rankings for your clients and
| their competitors. SEMrush also generates reports for keyword
| rankings that are helpful to provide clients. I haven't used it
| in a few years but I found SEMrush to be a good tool and worth
| the cost if you have clients.
| ErikAugust wrote:
| Believe in yourselves: If a scraper (SEMrush) of another scraper
| (Google Search) can IPO, the sky really is the limit.
| mobilio wrote:
| This is great news! I know SEMRush from early days and i know
| their current growth.
| boynamedsue wrote:
| The people that spam my referrer logs are going public?
| enahs-sf wrote:
| Growing profits, shrinking losses and a product I've literally
| used to build my business. I don't see how this isn't a winner
| long-term.
| ErikAugust wrote:
| At what price would you buy it though? 1000 P/E? No thanks.
| Besides you need to account for all the risks.
| dmurray wrote:
| Good news is that this company is aiming quite a lot lower
| than 1000!
| bostonsre wrote:
| The risk section of the s1 is pretty large. At least for the
| SEO portion, I would guess the biggest risk is that google gets
| wise and figures out how to block search result scraping
| better. It is a constant battle to react to changes made to
| prevent scraping by coming up with new work arounds to get
| around those changes.
| edoceo wrote:
| Wow. An SEO IPO. Is the real bubble indicator?
| notyourday wrote:
| I'm more shocked to see JPM and GSCO taking this on.
| [deleted]
| dna_polymerase wrote:
| Why? People will buy this, just because it's another Tech-
| Stock. People bought Nikola and Wirecard just because they
| have to do something with compute/tech.
|
| As for JPM and GSCO it's good business.
| moat wrote:
| Meh, not impressed.
| https://community.investing.io/c/forum/semrush-files-to-go-p...
| fumar wrote:
| how do you like investing.io?
| digitalbase wrote:
| They did a small acquisition September 2020
|
| https://www.semrush.com/news/semrush-acquires-fast-growing-s...
| dclaw wrote:
| Lol... I literally block semrushbot on all of my servers. They
| are a trash company.
| DoofusOfDeath wrote:
| > They are a trash company.
|
| How so?
| ratww wrote:
| Don't know if this is the reason OP hates it, but for me
| SEMRush and similar companies are the reason the web is
| littered with blogspam for pretty much every topic.
|
| Content Marketing companies and Content Farms use SEMRush to
| figure out which topics are covered by competition of their
| clients and which topics would attract visitors, and then pay
| pennies to a non-expert freelancer to produce a very shallow
| text with content probably copied from the same competitor,
| and littered with keywords recommended by SEMRush. Then, this
| text rises to the top of Google while non-SEO optimized
| quality content lingers in obscurity.
|
| How Google doesn't go after those shady practices is beyond
| me. They're probably just afraid of killing a whole industry
| and having an antitrust target on their backs.
| Xevi wrote:
| Imo the problem mainly lies in Google's square. All SEO
| tools exist for the reason of it being possible to game
| search results in the first place. It's inevitable that
| companies will offer tools and services to do so when
| there's such a huge market for it.
|
| Google has gotten better at discerning between crap and
| quality content, but they still have a long way to go, and
| I'm unsure if it can be fully fixed the way search engines
| currently work.
| kilroy123 wrote:
| Personally, I've given up hope Google will be the one to
| do this. They have serious talent and no one can deny
| this but IMHO Google lacks vision and leadership. They've
| simply lost their way.
|
| Even their search results have gotten worse and worse.
| dcist wrote:
| Google's fix for spammy results seems to be favoring
| large corporations, governments, and putting results on
| their own page (so-called "rich results" fka "rich
| snippets).
| bastawhiz wrote:
| Same. Their bots index content that they have no possibility of
| being able to parse or use (binaries?!) and at a rate far above
| anything that could be useful or reasonable.
| jedc wrote:
| CEO and co-founder still owns 45.7% of all shares!
| sixhobbits wrote:
| > We have incurred annual net losses since 2016 and expect to
| continue to incur net losses in the future. We incurred net
| losses of $10.2 million and $7.0 million for the years ended
| December 31, 2019 and 2020, respectively. As of December 31,
| 2020, we had an accumulated deficit of $35.8 million. We do not
| know if we will be able to achieve or sustain profitability in
| the future. We plan to continue to invest in our research and
| development, and sales and marketing efforts, and we anticipate
| that our operating expenses will continue to increase as we scale
| our business and expand our operations. We also expect our
| general and administrative expenses to increase as a result of
| our growth and operating as a public company. Our ability to
| achieve and sustain profitability is based on numerous factors,
| many of which are beyond our control.
|
| how unusual is it for companies to ipo without profit or even a
| clear path there?
| agloeregrets wrote:
| Common but it's one of those things that should come with a
| label on every single ticker or such. As it stands, without any
| plan or goal to become profitable, investors should acknowlege
| that they are incurring extreme risk and are investing on
| concepts outside of any actual plan to eventually turn a
| profit. To top it all off, they are just crawling Google.
| Google could potentially shut their entire game down any day.
| In a different era's market I would expect the SEC to shut it
| down and ask 'Why are you IPOing?' and 'Is this an attempt to
| exit from a failing business by misleading investors?'.
| akiselev wrote:
| It's been standard operating procedure in several high tech
| industries like biotech for decades. The FDA doesn't allow
| anyone to charge for anything related to medicine or medical
| devices until a premarketing application is approved so many
| biotech companies (if not most, since anything profitable pre-
| IPO is generally gobbled up by pharma) IPO with _zero revenue_
| and their success or failure is entirely dependent on a few
| binary decisions made by government agencies which ostensibly
| depend on the strength of the science.
|
| It depends heavily on industry dynamics; in biotech it's not a
| problem since "product-market fit" is essentially predetermined
| and there are very few "customers", which are limited to
| private/public insurers representing patients and pharma
| companies looking to grow their stock value. In software there
| is a lot of capital sloshing around because the vast majority
| of it goes towards payroll which can be scaled up or down on a
| whim and many times the return on an investment depends not on
| dividends from profits but acquisitions by other companies
| looking to move their own stock price (the public version of an
| acquihire). There's the additional factor that many tech
| companies have network effects that form semi-monopolies which
| can be an order or two of magnitude more profitable than
| competitive industries.
|
| You won't find the same level of unprofitable IPOs in resource
| extraction, for example, which is subject to the whims of
| governments, fluctuating prices, _and_ requires massive up
| front investments. Most of the excess capital goes towards
| hedging the aforementioned risks so dividends from profit is
| how money makes its way back to investors. Unprofitable IPOs
| only really happens when some company signs a big deal for
| mineral /resource rights with a government and spins off a
| separate company to raise money to exploit that deal without
| diluting the main company. If the government is considered
| reliable to investors, its perfectly normal to throw money in.
| jxramos wrote:
| Amazon reached its first reported profit like 10 years after
| founding. It's hard risk all the way through with funding
| needed to pay wages and other fixed expenses. Pretty amazing
| that people stick to it as long as it takes to become
| profitable. I'm not so sure my nerves could take all the
| suspense.
|
| https://en.wikipedia.org/wiki/History_of_Amazon
| a13n wrote:
| A lot of companies, and particularly Amazon, always have an
| easy path to profitability in their back pocket. They simply
| choose not to be profitable because it means they'll pay less
| taxes and grow faster. It's a lot easier to "stick with it"
| with this in mind.
| jxramos wrote:
| that's an interesting idea, could you comment on some of
| those deferred profitability strategies? How does that work
| precisely?
| weird-eye-issue wrote:
| You spend more money than you make to grow revenue and
| capture market share. Then you try to slowly become
| profitable over time. It's how nearly every growth
| company operates, whether it is a startup or public
| company.
| a13n wrote:
| If you make $100k in profit, you pay 21% in taxes, so it
| turns into $79k.
|
| If you instead invest that $100k into growth (eg. ads,
| sales people, marketers, engineers), you pay $0 of taxes,
| and can ideally generate an additional $200-300k revenue
| next year because of the investment.
|
| Would you rather have $79k now, or $200-300k next year?
|
| If you always invest, you'll grow faster and never pay
| taxes. With this in mind, why would these companies want
| to be profitable?
|
| The major assumption here is that you have a way to
| invest $x now into $x+ in the future. A lot of SaaS
| companies have this down to a science via metrics like
| CAC, payback period, etc.
| chmod775 wrote:
| Simply re-invest every bit of profit you would make.
| Build new locations, new services, hire more people, buy
| stuff, etc.
|
| Spending money isn't rocket science. Spending it wisely
| may be.
| jxramos wrote:
| is it safe to say reinvesting is counted as a loss for
| tax purposes then? How does the tax angle come into play,
| taxes are only on profit income not revenues?
| graeme wrote:
| Yes, taxes are only on profits. You don't need a loss per
| se, you just need to reinvest everything.
|
| The results would be crazy otherwise. Tech makes near
| 100% margins, grocery about 2%. But both industries would
| pay the same level of tax on 100% of revenue if it wasn't
| profit based.
| tofuahdude wrote:
| very common and the language in here is typical
| Xevi wrote:
| I think Unity also only had losses when they went public.
| poultron wrote:
| Not unusual. Look at Blue Apron. https://www.wsj.com/market-
| data/quotes/APRN/financials/annua...
| donsupreme wrote:
| Uber
| eaenki wrote:
| How are they at 144ARR and 76% gross margins losing money on an
| SEO SaaS?
| alvah wrote:
| This is the question I have too. Looks like they have far too
| many employees (IIRC around 10-20x their biggest rival Ahrefs,
| who incidentally aren't losing money). The headcount can't be
| all of it though.
| bladegash wrote:
| Very interesting! I have found their product a joy to use and I
| say this with all sincerity, credit it with getting our business
| out of a tough spot during COVID. Wishing them the best on the
| IPO!
| mprev wrote:
| What specifically did it do for you?
| bladegash wrote:
| Allowed for us to understand where we were doing well in
| terms of page rankings, where we were not, what keywords we
| needed to begin targeting to get the most traffic volume, and
| recommendations on what that content should consist of.
|
| We were also able to gain insights into competitors, what
| keywords they were targeting, where there were opportunities
| to hit keywords they were not, etc. It also gives estimates
| as to how much they are spending on advertising, which can be
| useful.
|
| While I'm sure other factors have contributed, our sales of
| IT services has tripled and verticals we were receiving no
| leads in are getting a significant amount. All organically.
|
| I will also say we were able to reduce our advertising spend
| from $1,500 to $0.00 per month.
|
| I can't recommend using SEMRush highly enough, especially for
| small businesses.
| [deleted]
| shrubble wrote:
| A very dishonest company whose scrapers are tough to block. They
| don't honor robots.txt and tell you that you have to add in
| special verbiage to get them to stop. They hop IPs from different
| ranges so they are difficult to range-ban.
| judge2020 wrote:
| Yep - they get blocked a lot by CF (probably for not honoring
| robots and crawling random websites for marketing purposes) yet
| a lot of people use it and wonder why it's blocked:
| https://community.cloudflare.com/search?q=Semrush
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