If you're building a two-sided marketplace, you'll spend a lot of time talking about GMV. Investors will ask about it. You'll track it. You'll celebrate milestones around it. But GMV is not revenue, and treating it like revenue is a modeling error that will catch up with you.
What GMV is
Gross Merchandise Value (GMV) is the total dollar value of transactions processed through your marketplace. If 1,000 buyers each spend $100 on your platform in a month, your GMV is $100,000. That's the total economic activity your marketplace facilitated.
Revenue is what you keep. If you charge a 15% take rate on every transaction, your revenue from that same $100,000 in GMV is $15,000. That's the money that actually flows to your business.
Why the distinction matters
GMV is a useful metric for understanding the scale and health of your marketplace. It tells you how much economic activity you're enabling, which is a proxy for the value you're creating for buyers and sellers. High GMV growth is a strong signal that your marketplace is working.
But GMV is not what pays your engineers or your AWS bill. Revenue does. When you're modeling your business — setting hiring plans, calculating runway, projecting profitability — you need to work from revenue, not GMV.
The confusion between the two is common enough that investors will specifically ask about your take rate and how it's trending. A marketplace with $10M in GMV and a 5% take rate has $500,000 in revenue. A marketplace with $2M in GMV and a 25% take rate has $500,000 in revenue too. The unit economics are completely different, even though the revenue is identical.
Take rate mechanics
Your take rate is the percentage of each transaction you keep. Most marketplaces charge either the buyer, the seller, or both. Common structures include a seller-side fee, a buyer-side fee, or a split fee where both sides pay a smaller percentage.
Your take rate is one of the most important levers in your business model. Too high and sellers will find alternatives. Too low and you'll struggle to reach profitability. Most mature marketplaces operate in the 10–30% range, though this varies significantly by category.
Modeling it correctly
In Horizon's Marketplace model, you set your take rate as a percentage and the model applies it to your GMV projections to calculate revenue automatically. This means your income statement, burn rate, and profitability projections all flow from realistic revenue numbers — not inflated GMV figures.
When you're presenting to investors, know both numbers cold. GMV shows traction. Revenue shows business model viability. You need both to tell a complete story.