10/10: 2D TAM/SAM/SOM – A Higher Common Sense

Streamline Realty’s Market Size Estimates:

TAM: $229 billion (2.29 billion people)

SAM: $4.78 billion (47.8 million people)

SOM: $290 million (2.9 million people)

The following section outlines our methods and assumptions to compute the above estimates for TAM/SAM/SOM.

1. TAM: $229 billion (2.29 billion people)

Market: Any potential prospective homebuyers, renters, and other real estate participants in the global real estate market

Approach: To estimate the TAM, we used the following formula:

TAM = (Number of potential active users) × (Avg. revenue per user) = (Global population × % in eligible age brackets × % with reliable internet access) × (Avg. revenue per user)

Assumptions:

Global Population: 8 Billion
% in eligible age brackets: 53%
1. Anyone between the ages of 20 to 60. United Nations Estimates (Source)
% with reliable internet access: 54%
1. We assumed that individuals with reliable internet access would at least have a minimum capability to buy or rent properties (% under the poverty line is significantly lower than % with reliable internet access). Estimates from ITU (Source)
Avg. revenue per user: $100
1. Assumed that Streamline Realty’s average revenue per user would stay constant ($250 million in revenue / 2.5 million users = $100). While there will be more revenue streams in the future, expansion to international markets will lower the average property prices listed on Streamline Realty’s platform. Thus, we assumed that the effects of the increase in revenue streams and the decrease in average property values listed would cancel each other out, resulting in the $100 avg. revenue per user mark)

Calculation: TAM = 8 Billion People × 0.53 × 0.54 × $100 = $228,960,000,000 (2.29 billion people)

2. SOM: $290 million (2.9 million people)

Market: Potential prospective homebuyers, renters, and other real estate participants in the US real estate market

Approach: To estimate the SOM, we used the following formula:

SOM = (Number of active users in 1yr) × (Avg. revenue per user)

Assumptions:

Number of active users in 1 year: 2.9 million active users
1. Assumed 15% YoY growth, which is consistent with Streamline Realty’s YoY revenue growth (2.5 million users × 1.15 = 2.875 million users)
Avg. revenuer per user: $100
1. Same rationale as in the TAM case

Calculation: SOM = 2.9 million users × $100 = $290 million

3. SAM: $4.78 billion (47.8 million people)

Market: Potential prospective homebuyers, renters, and other real estate participants in the US real estate market

Approach: To estimate SAM, we used the following formula:

SAM = (Number of potential active users) × (Avg. revenue per user) = (US population × % in eligible age brackets × % with financial capacity to buy/rent × % choosing Streamline Realty) × (Avg. revenue per user)

Assumptions:

US Population: 320 Million
% in eligible age brackets: 54%
1. Anyone between the ages of 20 to 60. Census Data Estimates (Source)
% with financial capacity to buy/rent: 76.8%
1. Derived based on the % population in poverty. We assumed that those under the poverty line, as well as those who make slightly above the poverty line, would not have the financial capacity to buy or rent properties. Thus, we assumed that 2 × 11.6% (US population living in poverty) = 23.2% will not be able to buy or rent (Source)
% choosing Streamline Realty: 36%
1. The current largest player in the market has an estimated 36% market share (Source). We assumed that this market share is achievable once growth plans in Streamline Realty’s products are executed in the US (such as increasing service offerings in property mgmt. or real estate investing, implementing AI/AR/VR technology, etc.)
Avg. revenue per user: $100
1. Same rationale as TAM & SOM