The Business Inquirer #041
In this issue, I highlight eight listings including an Atlassian app, an environmentally friendly coffee brand, a marketing agency, 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 - 1 listing
☁ SaaS - 2 listings
🕸 Content/Marketplace/Service - 5 listings
🧐 What I Learned Last Week
The Business Inquirer is brought to you by DueDilio. DueDilio is the first M&A due diligence marketplace connecting business buyers and investors with quality, verified due diligence experts.
🛒 eCommerce
Environmentally Friendly Single Serve Coffee - $500k
For sale is 13-year-old My-Cap, an environmentally friendly single-serve coffee product brand. The listing is pre-qualified for up to $56k in financing. Interesting business.
Sells on Amazon, Shopify, eBay, Walmart, and through reseller in Canada.
Fulfillment by FBA and own warehouse; 30 SKUs;
AOV: $15; Avg profit margin: 32%; Refund rate: 2%; 24% repeat customers;
Average 2,500 sales per month, 75% Amazon sales, 20% web sales, 5% eBay sales
TTM Revenue: $483k; Profit: $156k; Margin: 32%;
Asking: $500k; Multiple: 3.21x
✔ What I Like
Interesting listing from a few angles. First, my understanding is that the sellers also own the manufacturer who produces these products. So new owner would still have to purchase these from the sellers (from their mfg). Second, the business itself is on-trend as being an environmentally friendly solution for coffee lovers. Nice margins, low refund rate, diversified distribution channels. Multiple seems OK. A lot of operating history. The listing is very detailed.
❓ Questions & Concerns
Big question is the relationship with the manufacturer. Today, the manufacturer has no incentive to sell the products to anyone else. With a new owner, this incentive vanishes. I’d want to understand this better. The 24% repeat customer rate seems a bit low for a product like this. How are customers acquired?
You can view the listing on Flippa.
☁ SaaS
Atlassian App - $500k
For sale is a 4-year-old Atlassian Marketplace App portfolio consisting of five apps in the Agile Workflow Visualization niche.
Clients include F500 companies
$7.2k customer LTV; $25k MRR
TTM Revenue: $315k; Profit: $239k; Margin: 76%
Asking: $500k; Multiple: 2.09x
✔ What I Like
Good operating history. Strong margins. Valuation looks cheap. Broadly, collaboration software like Atlassian is seeing strong growth. One of the largest enterprise software marketplaces with over $1B in lifetime sales. There are 50 businesses built on Marketplace that have grossed over $1M in revenue. They pay out developers 85% for cloud apps. 75% for data center apps. 70% for server apps.
❓ Questions & Concerns
With any platform app, one of the concerns is always that the actual platform will just incorporate those features and render the app useless. The valuation looks suspiciously cheap for today’s market. I haven’t seen too many Atlassian apps listed for sale. Is there a reason for this?
You can view the listing on FE International.
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Social Media Marketing Automation - $7.1M
For sale is a 5-year-old social media marketing automation software for entrepreneurs and SMBs. Lifestyle business.
Tech: Ruby on Rails; Includes mobile apps;
500 blog articles; 50k-100k monthly unique visitors; 154k e-mail list;
Detailed SOPs; Requires 1 PT dev to maintain tech;
Avg revenue: $184k/m; Profit: $129k/m; Margin: 70%
Asking: $7.1M; Multiple (est): 4.58x
✔ What I Like
Well-aged business. Typically, lifestyle businesses have great SOPs because a lot of work is outsourced. Simple, stable tech stack built in the US. No client concentration or custom pricing plans. Low churn. Steady, consistent traffic and financials. Nice margins.
❓ Questions & Concerns
Investment needed to add additional features in order to scale. Listing mentions that marketing is on autopilot but with the recent privacy changes (FB/GOOG/AAPL) does it still function as expected? I’d want to understand why the owner is selling.
You can view the listing on Empire Flippers.
🕸 Content/Marketplace/Service
Acquisition Entrepreneur Community - $75k
For sale is a 1.5-year-old online community for acquisition entrepreneurs focused on SMB. Includes community, monthly networking events, and panels. Generates revenue from sponsorships and ticket sales.
Competitors: Searchfunder
TTM Revenue: $21k; Profit: $19k; Margin: 75%
Asking: $75k; Multiple: 3.95x
✔ What I Like
Niche communities can be extremely profitable. Very hard to start but once you get traction, easy to monetize. EtA is having its moment in the sun. Seeing a lot of communities and tools pop up in this space. Searchfunder is the clear leader right now in the community space but there’s a lot of room for improvement and for new entrants.
❓ Questions & Concerns
I reached out to the seller but haven’t heard back yet. I wonder if it’s the EtA community that’s for sale? I’d want to understand the stats around users, engagement, and growth. What’s been the response from advertisers? How are new users acquired?
You can view the listing on MicroAcquire.
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Investor Database - $10k
For sale is a 2-month old MicroSaaS that sells access to a database of 1,500 startup investors. Revenue is generated from monthly subscriptions. Opportunity to buy or partner up.
Competitors: InvestorHunt, Crunchbase
Tech: Webflow, Airtable, Zapier
200 free users; 8 paid users;
$190 MRR; Asking: $10k
✔ What I Like
Simple subscription model to a dataset. You can enrich the data to provide more value. A lot of marketing opportunities for the data through partnerships. Decent traction although it’s only been a month or two. Could be a nice starter business for someone to join or buy. Can create a newsletter around the data and charge for sponsorships.
❓ Questions & Concerns
I feel like I’ve seen this type of data available for free - Visible Connect is one such source. How would this data be different? Business is very early so tough to say if $10k is the right asking price.
You can view the listing on MicroAcquire.
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Full-Service Marketing Agency - $2M
For sale is a 3-year-old full-service marketing agency specializing in sales operations for digital marketing agencies.
Competitors: Haske Media, Cleverly, Salesprocess
Tech: Zapier, Bubble, Node; 30 person team;
100 meetings/m from Google Ads; 20% close rate;
TTM Revenue: $1.4M; Profit: $400k; Margin: 28%
Asking: $2M; Multiple: 5.00x
✔ What I Like
The listing mentions that there’s proprietary software and systems which enable the business to scale faster than the competition. The 20% close rate is relatively high from what I understand.
❓ Questions & Concerns
Valuation is up there. Will the employees stay on? What’s the strategy to scale this further? Any risk of customer churn if there’s a new owner? This one is for someone who is already in the space.
You can view this listing on MicroAcquire.
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Fuel Delivery - Open to Offers
For sale is a 2.5-year-old B2B fuel delivery startup operating in San Francisco. Founders have another business they’re working on and want to sell. Interesting business model.
Competitors: Booster Fuel, Yoshi, Filld
$350k in funding
TTM Revenue: $430k; Profit: $70k; Margin: 16%
Asking: Open to Offers
Just an interesting business. They partner with local gas stations and resell fuel while charging for delivery. They have a few trucks, fuel pumps, and a mobile app. They already have partnerships with Shell and Chevron. This is for a very specific buyer but interesting to see the business model.
You can view the listing on MicroAcquire.
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Winch Mania Content Website - $25k
For sale is 3-year-old Winch Mania, a content website in the trucking/auto niche. The website generates revenue from display ads and affiliates. The website is being sold through The Website Flip Brokerage run by Mushfiq S, who I’ve mentioned many times previously. A lot of easy-wins to improve earning potential and Mushfiq can offer some guidance. Only one day left in the auction, reserve met, currently going for $25k which is a 1.00x multiple. Content websites are far outside my competence but this one seems like a pretty good deal so figured I’d mention it.
You can view the listing on Flippa.
🧐 What I Learned Last Week
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How to hire outsourced developers
There are a lot of situations where you may want to hire outsourced developers. I’m sure we’ve all heard horror stories so I am always on the lookout for helpful resources to help me hire outsourced anything (dev, marketing, writers, etc). This is a great Twitter thread on how to hire devs…
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Earnings stability
I’ve talked about this a few times in this newsletter but I am cautious of businesses that have seen a sharp rise/fall in profit or revenue. It requires a lot more due diligence to figure out the cause and sustainability of these sharp moves. Justin Vogt of Evermore Industries has a short thread about this…
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Pessimists sound smart. Optimists make money.
This is a bit different than the usual topics I highlight but I think we can all use a bit of optimism. Kevin Kelly is the founder of Wired Magazine and published a guest post for Warp News - a fact-based optimistic news organization.
Summarized by Brad Slingerlend of NZS Capital:
Kevin Kelly details his case for optimism, both short and long term. I’ve often said, the cynic is never right in the long term, a statement I believe more with each passing day. Kevin comments on the asymmetry of the future in his beautiful case for optimism: “Every question answered by science generates at least two new questions, two new territories of unknown things that we now know we don’t know. In this way our ignorance expands faster than our knowledge, which is healthy. Because behind this expansion there is a great asymmetry: what is knowable but still unknown will always be larger than what we already know, meaning there are more possibilities waiting to be discovered than have already been discovered. This asymmetry in knowledge is reason to be optimistic, because it means there are no limits to our improvement.” And he addresses the importance of compounding: “The solutions to most problems will create new problems. But if we can create 1% more solutions than problems, that 1% compounded over decades equals civilization. However 1% of almost anything is invisible in the now, lost in the noise. Such a small differential is really only visible in accumulation and seen in retrospect.” Kelly also details seven reasons for being optimistic right now: urbanization, connectivity, AI/robots (liberating humans from unwanted jobs), green energy, accelerating pace of innovation, bio-engineering, and the rise of a more optimistic younger generation. For investors, I believe it always pays to be optimistic in the long run. Some businesses' success hinges on a cynical outlook – perhaps they rely on customers not knowing better or assume that quality doesn’t matter. Rarely are these going to be good long-term investments because they typically have some sort of vulnerability that an optimist will inevitably target to start syphoning their customers away.
Great read…Kevin Kelly: The Case for Optimism
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MicroSaaS growth course
Jon Hainstock recently released his Micro SaaS Growth course and it’s discounted from $99 to $49. I can’t personally vouch for it but I saw it advertised in a MicroAcquire e-mail.
In this course, I walk you through the processes and strategies we used at ZoomShift, the bootstrapped SaaS my co-founder and I built, grew, and exited. You'll see how I'm applying my learnings to HelloCargo, a MicroSaaS company I partially acquired from MicroAcquire.
I think you can get the discount using this link.
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SBA valuations
I recently had the pleasure of speaking with one of the founders of Ennerate. They use Artificial Intelligence and economic data to turn certified valuations around in under 48 hours and for less than half the cost of traditional methods. They’re backed by Y-Combinator. An interesting startup.
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That’s all for this issue of The Business Inquirer!
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