At Battery, we spend the majority of our time thinking about businesses and technologies that fundamentally alter or change the way consumers behave. Online, consumer marketplaces have played a crucial role in driving innovation and have become increasingly embedded into our everyday lives.

Today, the wealth of marketplaces at our fingertips is immense and more personalized than ever. With just a few swipes on a smartphone screen, and in a matter of minutes, a consumer can make plans on Bumble, schedule a dinner reservation on OpenTable, order a new outfit on RentTheRunway.com and request a car pickup on Uber.

But just twenty years ago, eBay and Craigslist were perhaps the only well-known online marketplaces connecting buyers and sellers of various products and services, which showcases the rapid development and growth of this software sector.

In many ways, 2023 was a watershed year for online marketplaces. As consumers shifted to purchasing all their goods online during COVID in 2020, the majority of online marketplaces – with the exception of the travel category – saw an unprecedented rise in order volume, revenue and subsequent share prices. Yet, in 2021-2022, as COVID restrictions eased but recessionary fears and interest rates rose, consumers began to pull back spending in certain categories, resulting in a sharp decline in growth rates, multiples and share prices. Many businesses that had “growth-at-all-costs” mindsets had to fundamentally re-orient themselves to profitability in order to prove sustainable, long-term shareholder value.

But what exactly have this year’s marketplace “winners” proven to us – and what can marketplace founders learn from them?

We created a new report — “The State of Marketplaces” — to answer those questions and explore the successes and challenges publicly-traded marketplace businesses experienced in the last year. In doing so, we aim to guide founders through the fundamentals of what drives value in a marketplace.

Download “The State of Marketplaces” report here.