3-Sided Marketplace Excel Financial Model Template

Financial model of a 3-sided marketplace where you have: supplier, the end-customer and a 3rd party i.e. advertiser

by Asen Gyczew
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Original Best Practice:  Marketplace Financial Excel Model  by Asen Gyczew

Description
In this Excel Financial Model you will find a model of a 3-sided marketplace. In a traditional marketplace you have 2-sides: the end-customer and the supplier. However, more and more marketplaces are 3-sided. The "3-side" firm may be for example and advertiser, provider of tools or assets for the suppliers. In this file, I will show you how to create in Excel a 3-sided marketplace model.

3-sided marketplaces are much more complicated to model than the traditional market. Moreover, you can actually make break-even on the end customers and suppliers, and you need the 3rd side to generate the profits expected by your shareholders. You can find such examples in all big marketplaces: Uber - the "3-side" are: car producers, advertisers in the future, Postmates (bike and other accessories producers) etc.

In the model I will show you how to build the model of a 3-sided marketplace, on the back of traditional marketplace model. The 3rd side is a source of profit but will also require additional efforts when acquiring them. Therefore, you will have to model it independently as well, to see how much cash it will require. That is one of the reasons why the 3rd side is only added after some time. At the beginning startups tend to concentrate only on 1 of the sides of the marketplace. The 2nd side is also addressed but with limited resources and attention. The 3rd sided is only added when the market is mature. The model can obviously be used also to model a 2-sided marketplace.

If you have any questions, you're welcome to reach out to me via Private message here: https://www.eloquens.com/channel/asen-gyczew

This Best Practice includes
1 Excel Marketplace Financial Model Template