GMV is the total value of everything sold through a marketplace, and it is routinely confused with revenue. Here is what it actually measures.
Gross merchandise value (GMV) is the total monetary value of goods or services sold through a marketplace or platform over a period, before fees and costs. It is not the platform's revenue.
GMV measures the volume flowing through a platform, not what the platform keeps. A marketplace that processes $10M in transactions has $10M GMV, but its revenue is only the take rate it charges (say, 15 percent, or $1.5M). GMV is a useful scale and growth metric for marketplaces and e-commerce, but presenting it as revenue is one of the most common and misleading moves in startup reporting.
A marketplace processes 50,000 orders averaging $40 each in a quarter. GMV = 50,000 x 40 = $2,000,000. If the platform's take rate is 12 percent, its actual revenue is $240,000, a very different number from the headline GMV.
GMV shows the size and growth of the economic activity a platform enables, which matters for marketplaces where the business scales with transaction volume. But because GMV dwarfs revenue, it is frequently used to make a business look bigger than it is. Sophisticated readers always ask for the take rate and net revenue behind a GMV figure.