Marketplace Metrics 

Here are the key metrics for marketplace startups:

Match rate – the rate at which buyers and sellers engage with each other.

To calculate, take the number of transactions in which there is a successful match and divide by the total number of attempted transactions.

Time to match – how long it takes to match a buyer and a seller.

To calculate, take the time to match for each transaction and calculate the overall average. 

Concentration – measures how fragmented or concentrated the buyers or sellers are.  

To calculate, take the top 10 buyers or sellers and measure their gross margin value and compare to the total gross margin value.

Take rate – the amount of revenue the marketplace takes from each transaction.

To calculate, review the transaction fee divided by the gross margin value and average across all transactions.

Unit economics – the business model shown at a unit economic level rather than in aggregate.

To calculate, measure the customer acquisition cost and organic customer rate over time to see if the former is going down and the latter is increasing.

User retention – measures the length of time the user stays with the company.

To calculate, average the time users stay with the company and track in each cohort to see if it’s increasing over time.

Marketplaces have their own metrics with which you can measure the effectiveness of your startup.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

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