NYSE:PERF
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On Wednesday, Perfect Corp. (NYSE:PERF) closed its acquisition of Wannaby Inc. Wannaby, known as WANNA on Crunchbase, is the provider of a try-on technology platform for the fashion industry. It is located in Redwood City, California, and Lithuania and has approximately 24 employees. The company was acquired from Farfetch, a leading global marketplace for luxury fashion, owned by Coupang (NYSE:CPNG) of South Korea in 2022. The Farfetch marketplace connects customers in over 190 countries and territories with items from more than 50 countries and over 1,400 of the world’s best brands, boutiques, and department stores. Farfetch and Coupang currently use the Wannaby platform and will become Perfect Corp.’s customers. Besides Farfetch, significant customers include Lululemon, Dolce & Gabbana, Diesel, Valentino, Reebok, and Allbirds. Wannaby has 20 key customers, who together, by definition, buy at least $1 million in services from Wannaby. The company specializes in shoes, bags, watches, jewelry, scarves, and apparel. The company reported that in 2024, it facilitated 17.5 million virtual try-ons, 1.7 million views in WANNA 3D Viewer, and 1.5 million experience photos taken. The acquisition expands Perfect Corp’s capabilities, product offerings, and customer reach, particularly in shoes, bags, scarves, and apparel, as those are categories the Perfect platform did not support. The integration process has already begun.
Wannaby Virtual Try-On of Bags
Although the price of the acquisition has not been released, we know it was all cash. We also know that Wannaby was bought by Farfetch in 2022 for $30 million. Assuming they did not pay more than 10 times sales, Wannaby could have been generating at least $3 million in sales. The luxury products market fell on hard times since then so those revenues probably declined. We do not believe Perfect Corp. paid anywhere near $30 million. We think that conservatively, Wannaby could add at least $2 million to revenues in 2025 and are raising estimates for Perfect Corp for 2025. With successful cross-selling and integration with the Perfect platform, that number could be higher. We believe the company will give more information when it reports earnings a month and a half from now. We also expect management to give initial guidance on 2025. As a profitable AI-based SaaS company, we believe it deserves an EV-to-sales multiple of at least 2.7 times 2025 sales and a stock price of $3.51.
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