Miso is raising a Crowd SAFE at a $150 million valuation. That valuation is extremely high compared to most crowdfunding startups, but Miso is also a good deal more successful than most crowdfunding startups. Miso generated almost $7 million in revenue last year, so a $150 million valuation translates to a 21x revenue multiple on last year’s revenue. For 2021, Miso is projecting roughly $10 million in revenue, or a 15x multiple. For context, Airbnb (arguably the most famous two-sided marketplace in the world) also hovers at a 15x-20x revenue multiple in public trading. Miso’s revenue multiple is somewhat reasonable by comparison, but clearly the company must achieve tremendous growth to reach the same level as Airbnb. Overall, Miso’s valuation is not entirely unreasonable but is a bit higher than many investors might feel comfortable with.

Miso currently serves South Korea, so the company’s present addressable market is relatively limited. South Koreans spend roughly $5 billion on home cleaning and services per year. Miso can expect to capture only a small percentage of that market size, given the quantity of local home service providers competing for business. 

However, Miso’s market prospects are attractive if the company manages to expand outside of South Korea. The global market for cleaning services alone is expected to reach $88.9 billion by 2025, growing at a compound annual growth rate of 6.3%, and cleaning is only one of Miso’s 70 service categories. As Miso adds new service lines and launches in additional countries, the company’s market prospects will expand significantly. Virtually any adult with disposable income could be a Miso customer, so the company has strong market potential.

Miso was founded by Victor Ching, a serial entrepreneur. Ching earned a degree in business from the University of Illinois at Urbana-Champaign. It’s unclear how he spent roughly a decade between college and starting his first business, but in 2011, Ching became a founder for the first time. That company folded in less than a year, and Ching then joined Delivery Hero, a large delivery app in Korea, as chief product officer. After a relatively short time there, Ching founded his second company (a dating app), which shut down less than two years later. Miso, which he founded in 2016, is his third company. 

The Miso team also includes Vice President Chanyong Kim, Product Lead Heuicheon Yang, and more than 50 other employees across a range of departments. Miso’s senior leadership team is apparently rather small, but Kim does have 20 years of business experience in successive roles at successful Korean startups. 

Miso has experienced a great deal of success in its five years of operations, so Ching and his team are clearly competent business leaders. However, no one on the team has particularly impressive credentials prior to Miso.

Miso offers a superior user experience for those looking to book home services when compared to the traditional method of Googling and browsing through various vendors. It’s undeniably much easier and more trustworthy to purchase home services through a vetted marketplace with community reviews and transparent pricing. 

However, Miso faces a great deal of competition. There are several Korean startups allowing consumers to book house cleaners, handymen, and more. If Miso expanded to the US, it would face an even stiffer battle. Established companies like Angie’s List (now Angi), Thumbtack, and more are already household names. 

Regardless of nationality, all of these companies offer a very similar user experience. There’s little obvious differentiation between brands. Miso doesn’t appear to boast any meaningful competitive advantages that could guarantee its success in this crowded field of competitors.

Thus far, Miso has experienced the success that many startup founders dream of. In five years, the company has raised more than $11.5 million from top venture capital firms like Y Combinator and Social Capital. Miso seems to have leveraged that capital to build a strong brand in Korea, where it seems to be one of the most popular home services marketplaces. More than 350,000 customers have connected with 40,000 service providers, generating more than 3 million bookings and more than $150 million in gross booking value. 

Revenue growth in recent years has also been strong. Miso generated more than $5.7 million in revenue in 2019 and nearly $7 million in 2020. That’s a particularly impressive feat during the pandemic, which shut down much of Asia for months. Growth has continued this year, as Miso projects $10 million in revenue for 2021. Unsurprisingly, Miso is spending a great deal of money to produce that revenue. The company posted a roughly $2 million net loss last year, with a great deal of spend on customer acquisition marketing. 

Miso is backed by top-tier investors who clearly believe in the company’s vision to bring convenience to home services worldwide. Over the last several years in South Korea alone, Miso has demonstrated a great deal of success. With strong year-over-year revenue growth and even more potential upon launching in new markets, Miso is on a very positive trajectory.

Miso is a relatively low-risk investment because it has been operating for five years, is backed by top-tier venture capital firms, and has already generated several million dollars in revenue. The minimal risk that does exist lies in the areas of investment terms and team. With regard to terms, Miso is slightly overvalued at a $150 million valuation. That means the company must continue growing rapidly to deliver returns to investors. Team-wise, Miso’s founder only owns 30% of the company, which means he’s slightly more likely to depart and leave the company in dire straits. But overall, Miso seems to be a stable business and a solid investment opportunity.

Miso has been a very successful business in South Korea, but it’s difficult to predict whether the company will be successful with its international expansion plans. Expansion is necessary to justify Miso’s valuation and continue along a strong growth trajectory. However, Miso might struggle to launch in the US. The company is succeeding in South Korea because it is benefiting from marketplace network effects bolstered over the last five years. It will take a long time to build that flywheel of growth in the US, particularly because the US already has a number of well-known home services companies. Competition will be a constant risk for Miso, as marketplace apps have minimal defensibility. So while it’s obvious that Miso is a successful startup in one local market, there’s no evidence yet that expansion efforts will justify the company’s massive $150 million valuation.

Miso isn’t a particularly innovative idea. However, everything about Miso’s history indicates that the company has what it takes to be successful. Miso’s founder has founded two companies before. Both have failed, but those experiences often provide the best entrepreneurial lessons. He’s successfully raised $11.5 million for Miso, including an $8 million Series A round. The Miso team is large and growing, and the company has proven its ability to generate additional revenue opportunities. 

In terms of revenue, Miso is posting strong numbers. More than $5.7 million in revenue for 2019 was solid. And its nearly $7 million in revenue for 2020 is particularly impressive given the impact of COVID-19 on in-person home service bookings. Miso has clearly found product-market fit with more than 350,000 paying customers. And Miso has opportunities to increase lifetime value with product extensions. If Miso continues along this current trajectory, the company could grow into a major success story.

Miso is a home services booking company that facilitates home cleanings, household repairs, and even home renovations through a two-sided marketplace app. Miso has found a strong product-market fit in South Korea and plans to expand internationally. More than 350,000 paying customers have generated more than 3 million bookings over the last five years. Miso is also backed by top-tier venture capital firms and seems to have what it takes to grow rapidly with product and market expansions. 

Miso does face stiff competition from other home services booking companies in both Korea and the US. And it doesn’t have any particular competitive advantages in terms of product, particularly when compared to well-established US companies. Its valuation isn’t outrageous for such a successful company, but it may be higher than some investors would like. However, Miso’s founder is a seasoned entrepreneur with a proven ability to raise money and grow a business. If Miso can introduce new revenue opportunities, grow lifetime value, and begin carving out a foothold in the US, the company could be a tremendous success. Therefore, Miso has been rated a Deal to Watch. 

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com. 

Analysis written November 19, 2021.