The DL — An inside view into Pacific Northwest Tech

America’s CEO Factory?

Financials of Sea-Tac Businesses

  • In FY16, the three duty free stores at Sea-Tac generated ~$20M
  • All airport leases are based on a percentage of revenue — for the restaurants, they pay ~10% of their revenue to Sea-Tac as rent. But for Dufry, it’s 36% of revenue! Talk about value capture!
  • Floret is forecasting ~$4.1M of revenue for 2019, and that should generate ~$300K in EBITDA
  • Their tiny 350 sqft bakery in Pike Place did over $3.1M in annual sales in 2015 (wonder what it is now)
  • They have 80%+ gross margins and ~25% operating margins
  • The MOD Pizzas at Seattle Center and Issaquah have annual revenue of $1.5M+ and sell more than $10K of pizza on peak days
  • MOD expects a ~12% EBITDA margin per store at steady-state
  • Sales in 2017 were $6.9M, almost double 2014 sales of $3.7M
  • At the airport, Beecher’s is not allowed to charge prices that exceed “Street Prices,” defined as “prices commonly recognized by the public”
  • The Starbucks Urban Market store at the airport expects to make $7–8M per year and generate $700–800K of EBITDA
  • Starbucks has the prettiest presentation (good template to pitch the airport on a new business!)
  • Wow — lounges are profit machines! In FY16, The Club at SEA brought in $2.2M of revenue and generated $1.6M of net income (73% margin). Better than SaaS!
  • Gross revenue for FY19 was $20.1M! Location is so important — great to have that big spot in the middle of the airport

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About me: I work as an investor at Madrona Venture Group, a Seattle-based venture capital firm that has been early partners with companies like Amazon, Smartsheet, Apptio, and Redfin.

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Daniel Li

Daniel Li

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Founder of Plus, a tool to help people easily capture, see, and share data. Formerly a VC at Madrona Venture Group. Writing about startups and investing