The Business Inquirer #034
In this issue, I highlight 8 listings including two NoCode newsletters, a Google Workspace add-on, a geolocation Shopify app, and What I Learned Last Week.
The Business Inquirer covers the most interesting tech-enabled business acquisition opportunities. Written for entrepreneurs, search funds, investors, and business owners. It’s completely free and you’re guaranteed to learn something new.
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In this week’s issue:
🛒 eCommerce - 0 listings
☁ SaaS - 4 listings
🕸 Content/Marketplace/Service - 4 listings
🧐 What I Learned Last Week
🛒 eCommerce
No listings. Nothing interesting caught my eye this week in e-commerce.
☁ SaaS
Shopify Geolocation App - $237k
For sale is a 2-year-old B2B Shopify App in the inventory geolocation display niche. The app allows merchants with multiple physical stores to display their inventory info per location to improve the in-store pickup experience.
5-Star rating; 450 active merchants;
TTM Revenue: $63k; Profit: $50k; Margin: 79%
Asking: $237k; Multiple: 4.74x
✔ What I Like
The 5-star rating provides a moat and hopefully, there’s a decent amount of those reviews. Assuming the 450 active merchants are paying clients, that’s a decent install base to grow from. These businesses typically have good margins.
❓ Questions & Concerns
The listing says that “revenue and profit figures are annualized based on a one-month basis”. Clearly have to dig into this. With Shopify Apps, I always have a concern that Shopify will just go ahead and include this feature as part of their platform. Not a lot of detail in the listing.
You can view the listing on FE International.
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Google Workspace Add-ons - $1.5M
For sale is a 3-year-old SaaS that includes multiple add-ons for Google Workspace ecosystem. Interesting listing.
Competitors: Jotform, PDFFiller, Formstack, Typeform
10M active installs; Top position in the Google Workspace Marketplace;
Installed at marquee clients like Zoom, Adobe, Asana, Slack, Trello, +more.
No sales team; No marketing; No social media;
TTM Revenue: $84k; Profit: $45k; Margin: 54%
Asking: $1.5M; Multiple: 33.33x
✔ What I Like
Single-founder bootstrapped business. Multiple add-ons with over 10M installs. That’s a huge base. I haven’t seen a lot of businesses for sale in this ecosystem. There’s growing interest in Google Workspace…
❓ Questions & Concerns
Let’s start with valuation. Either the seller is looking for a strategic acquirer with deep pockets or they just threw up a random number. Could be both. No sales, marketing, or social media presence means that margins will shrivel once you start implementing those functions. Who does customer support? How do you maintain the top position in the GW Marketplace? How are technical updates handled? How are the ratings and reviews?
You can view the listing on MicroAcquire.
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Analytics for Physical Locations - Open to Offers
For sale is a 9-month-old SaaS that provides analytics to retailers, smart buildings, restaurants, and schools to help them better understand their customers’ behavior in their brick-and-mortar venues. Provides foot traffic, conversion rate, dwell time, bounce rate, real-time occupancy, and more. Interesting listing.
Competitors: Aisleslabs, Retailnext, Shoppertrak
Reseller relationships with Cisco, IBM, NXO, Bell bring in sales
Clients locked into 1-year and 3-year plans. $10M sales pipeline
9-Month Revenue: $332k; Profit: $166k; Margin: 50%
Open to Offers
✔ What I Like
An interesting young startup that’s “The Google Analytics for Physical Locations”. Devil’s in the detail but love the reseller strategy, the sticky contracts, and the strong sales pipeline. Really interesting listing from a layman’s view. I’m going to do a bit of research into this industry. With scale, another angle to this type of business may be to package and sell this data to research firms, investors, etc.
❓ Questions & Concerns
I think this is a similar concept to Apple’s iBeacons. Whatever happened to that product? How do the reseller agreements look? How does this solution compare to competitors? Any client testimonials?
You can view this listing on MicroAcquire.
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All-In-One Business Tool - $139k
For sale is a 2-year-old “all-in-one” business tool for online business owners and entrepreneurs. It offers 50 software tools to help online business owners address the most commonly needed tasks.
Competitors: Zoho, Hubspot
Tech: LAMP stack
TTM Revenue: $110k; Profit: $46k; Margin: 42%
Asking: $139k; Multiple: 3.02x
✔ What I Like
The overall trend is clearly towards more businesses moving online, growing new business formation, and increased entrepreneurship…
Tough to argue against the need for budget friendly tools to run these businesses. Perhaps this tool has the right mix of functionality and cost to give it an advantage compared to other solutions. Valuation is reasonable.
❓ Questions & Concerns
The listing is not very detailed. It’s a relatively young startup going after a huge market - that presents a lot of challenges. Expensive challenges. This isn’t a new solution. Many have tried to create an all-in-one software package for entrepreneurs and have failed. What makes this different? What is the customer acquisition strategy? Are there partnerships in place? What type of updating do those 50 software tools require? A lot of questions here.
You can view this listing on MicroAcquire.
🕸 Content/Marketplace/Service
College Sports Newsletter - $75k
For sale is 1-year-old Extra Points newsletter about off-the-field forces that shape college sports. Published 4x a week and read by college sports fans, reporters, academics, and industry leaders. Written by Matt Brown, a writer for SB Nation, The Athletic and other publications.
5.2k free subscribers; 630 paid subscribers;
1.5k monthly page views; 700 monthly visits; 13k Twitter followers
Monthly Revenue: $3,924; Profit: $3,323; Margin: 85%
Asking: $75k (reserve); Multiple: 22.57x
✔ What I Like
Seller is open to a sale or partnership. Dialed-in reader base that’s worth a lot of money to advertisers. Includes a private community on Discord. Detailed listing.
❓ Questions & Concerns
Not a lot of operating history. Requires an experienced writer who knows this space. If you have to hire someone, those margins are dropping. Would people unsubscribe if the original writer was no longer involved? This is for a specific acquirer, maybe a bolt-on acquisition.
You can view the listing on Flippa.
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Content Agency - $625k
For sale is a 6-year-old productized service content Agency that sells into SaaS. In addition to the content writing service, there’s a complimentary podcasting service arm.
Owner removed from day-to-day; Team, SOPs, and processes in place;
16 person team; $45k MRR
TTM Revenue: $522k; Profit: $157k; Margin: 30%
Asking: $625k; Multiple: 3.98x
✔ What I Like
The immediate highlight is that the owner has implemented systems, workflows, and SOPs in order to not manage the day-to-day. This is huge. Don’t see enough of this. Well-aged business. Appears that most revenue is recurring, subscription-based. Valuation looks reasonable at first glance. SaaS is a good niche to target as content marketing and SEO become more important. Can add additional products and services to serve this market.
❓ Questions & Concerns
I’m seeing more and more content Agencies going up for sale. I wonder if there are structural things going on that are driving owners to sell. I don’t know enough about this industry to answer that. With such a crowded space, I’d want to understand customer acquisition strategies and costs. What’s the churn? How sticky are these types of clients/relationships? How difficult is it to scale up?
You can view the listing on MicroAcquire.
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NoCode Newsletter - $6.8k
For sale is a 4-month-old weekly newsletter that analyzes one new no-code startup idea per week.
140 free subscribers; 10 subscribers paying $19/month;
Last month revenue: $171; Profit: $171;
Asking: $6.8k
✔ What I Like
I am closely monitoring the NoCode space as I think there’s going to be a lot of value creation in that ecosystem. I like the idea of this newsletter and the traction so far. The whole NoCode movement is gaining popularity…
❓ Questions & Concerns
At this early stage, I think you could just recreate this relatively easily. Perhaps for $2k-$3k the purchase makes sense but not sure about the asking price. Some due diligence on subscribers would be prudent here.
You can view this listing on MicroAcquire.
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No Code Briefs Newsletter - $800
For sale is 11-month-old No Code Briefs which brings the latest news, products and resources about no-code. 440 subscribers. Not monetized.
You can view this listing on Duuce.
🧐 What I Learned Last Week
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Agency businesses for sale
I see more and more Agency businesses for sale. I had drinks with a subscriber last evening who happens to run a NoCode Agency. I used this opportunity to ask him some details about the challenges of this business model…
Limits on how much you can scale
Sales & customer service are very tough to outsource. Most of the time, owner has to be involved.
Writers, developers, digital marketers are not easy to source. Hard to replace if someone leaves.
Projects are usually not plug’n play. Someone new coming in won’t quickly be able to take over from someone who left. If someone leaves mid-project, this is a big issue and headache.
Standards and norms in emerging markets differ from developed. Expectations around communication, timelines are not always easy to align.
Buying another Agency is risky. Possibility of employees/contractors leaving.
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WordPress acquisitions
Subscriber Keanan Koppenhaver is an experienced operator in the WordPress ecosystem. He recently started the Micro-SaaS Monthly e-mail newsletter which follows along his journey to acquire and run a WordPress business. It’s a great read. I spoke to Keanan yesterday and he mentioned that he’s raising some capital for his latest acquisition and looking to close the round. Below are some details…
I'm in the process of raising debt to acquire a profitable and stable WordPress plugin business. The terms I'm offering are 10% interest per year for a 5 year term, with payments against both principal and interest paid monthly to the lenders. I'm currently looking at anywhere from $10,000-$50,000. Over 60% of the money has been committed already and I'm looking to close the gap and raise the rest of our funding in the next 45 days or so. Happy to discuss details further with anyone who's interested. I have years of experience in the WordPress space and am confident that this developer tool will be able to grow market share in the years to come.
If anyone would like to learn more, reach out to Keanan.
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Selling a business isn’t always a celebration
Entrepreneur’s Handbook has a great article titled “Selling Your Business Is Not the Marker of Entrepreneurial Success”. The author discusses lessons learned from analyzing 1,000 potential acquisitions and the real reason why a business may be for sale.
My throbbing fingers ached with searing pain from the repetitive motions: Research, Review, Reject, Repeat.
$200k asking price, $400k LTM revenue, and $330k profit. Sounds great, right? Pass. Their niche was banned across the world’s largest search engine and second-largest advertising platform.
$120k asking price, robust tech platform serving thousands of customers, maintaining 70% profit margin. Pass. The tech was built on a system that will no longer be supported, so a complete software rebuild is required.
$39k asking price, innovative B2B product with hundreds of paying subscribers, and $0 ad spend. Pass. The one platform through which they deploy their product is releasing their own streamlined competitor service.
Proper due diligence and subject-matter-expertise are key to any business acquisition or investment. Yup, DueDilio can help with that.
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FBA aggregators come to Shopify
Keith Rabois and Jack Abraham have officially launched OpenStore to provide “instant liquidity” to e-commerce entrepreneurs. They plan to acquire dozens of businesses over the next 12 months, targeting those with less that $5M in annual sales and ultimately creating an entity with $1B+ in annual revenue.
They’re building a self-service product where potential sellers talk to a chat bot to exchange information and ultimately receive an offer from OpenStore. This means the company isn’t wasting as much human time hunting for quality acquisition targets, but they’re still providing and receiving value. Sellers want to hand over data to the chatbot because they can get an actual valuation of their business in one day, which could be helpful for further negotiations with other buyers. Meanwhile, each seller interaction gives them an additional data point to incorporate into their pricing algorithm.
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New WordPress marketplace
Iain Paulson is the founder and publisher of WP Trends - a newsletter offering market insights for the WordPress ecosystem. Last week they launched FlipWP, a new marketplace to buy and sell WordPress businesses. The membership costs $299/year and you may be able (could have expired) to use code “WPTRENDS50” to get $50 off. First listings on the marketplace go live on June 28th. Curious to see the traction here. New marketplaces are popping up left and right. Not sure if I’d pay for access to something without seeing the listings first but that’s just me.
Similar topic - Tiny Acquisitions is another business marketplace that just launched. They sell projects priced <$5k. That’s their only criteria.
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That’s all for this issue of The Business Inquirer!
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