The Business Inquirer #046
In this week's issue, I highlight eleven listings including a SaaS for cannabis growers, a luxury goods authentication service, software for builders, and a cleaning service business.
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Hello Friends!
In this week’s issue:
🛒 eCommerce - 1 listing
☁ SaaS - 6 listings
🕸 Content/Marketplace/Service - 3 listings
🛠 Tools & Resources
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
Household Amazon FBA - $227k
For sale is an FBA store in the household niche. I’d call this a “special situation” listing.
6 SKUs; 3,500 reviews
TTM Revenue: $140k; Profit: $76k; Margin: 54%
Asking: $227k; Multiple: 2.99x
✔ What I Like
Inventory is handled by FBA and a 3PL. The store is registered with Amazon US while the seller is located in China. They are unable to manage the business for various reasons. Could be an opportunity for a new owner.
❓ Questions & Concerns
No details in this listing. A lot of questions around ownership, inventory, suppliers, and pretty much everything else. Amazon has been cracking down on Chinese vendors with fake reviews - is this one of those? Store revenue is on a downward trend due to poor management. Could be a value trap.
You can view this listing on BuySellEmpire.
☁ SaaS
E-Mail Strategy Tools for Teams - Open to Offers
For sale is a 7-year-old business that provides teams with tools to improve their email strategy. Includes a large collection of sample e-mails to learn from as well as team collaboration tools. Revenue is generated from advertising as well as SaaS model. This startup is available for sale or for a CEO to come in and manage the existing team.
Competitors: MailCharts
Collection of 9,000 best-in-class emails
TTM Revenue: $315k; Profit: $174k; Margin: 55%
Asking: Open to Offers
✔ What I Like
Well-aged business. Sellers ran it part-time as a hobby so there may be some easy levers to pull to increase revenue. Sounds like there are two monetization avenues including advertising and SaaS. Nice margins. Listing indicates # of customers is 10k - 100k. That’s a robust customer base. E-mail isn’t going anywhere and I think becoming more important as a marketing, sales, and overall communication channel. This would make an interesting add-on for an Agency or another business in a complementary niche.
❓ Questions & Concerns
I’d want to ask the typical SaaS questions around conversion, churn, CAC. What type of upkeep is required of the tech stack? How is the sample e-mail collection updated? Who are the main clients for this product? Are they in a specific niche? How does this product compare against the competition?
You can view the listing on MicroAcquire.
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SMS Extension - Open to Offers
For sale is a 3-year-old SaaS that is an extension that allows businesses to send automated & manual SMS to their customers and leads within a leading CRM (I think it’s Salesforce).
Competitors: SMS Magic, Kixie
7-person team; Qualifies for Pipe financing;
30-Day Revenue: $10k; Profit: $7k; Margin: 70%
TTM Revenue: $100k; Profit: $69k; Margin: 69%
✔ What I Like
Some operating history. Great margins. Sounds like it’s built on top of a popular CRM platform (probably Salesforce) so that should organically drive customers. About to launch a mobile app that will add an additional revenue source.
❓ Questions & Concerns
Seems like a large team relative to revenue. How does this solution compare to similar ones? Could the CRM just build this as a standard feature? How does the support look? Why is the owner selling? Is the team staying on?
You can view the listing on MicroAcquire.
— — — —
Staff Leave Tracker - $20k
For sale is a 10-year-old MicroSaaS that allows SMBs to track staff leave and other absences.
Competitors: Timetastic, E-days, Personio, Absence.io
Tech: RoR, MySQL, Javascript
< 100 clients
30-Day Revenue: $310; Profit: $200; Margin: 65%
TTM Revenue: $4k; Profit: $2.5k; Margin: 63%
Asking: $20k; Multiple: 8.00x
✔ What I Like
Could be a good first-time purchase for someone just getting started. There’s some traction and profitability. Business has long operating history so I assume the owners learned a lot along the way that they would share with the new owner.
❓ Questions & Concerns
I’d want to understand why the sellers couldn’t scale the business and why they think a new owner would be more successful. It’s always tough to think about valuation for these types of microSaaS listings. $20k feels like it’s a bit high but you’d really want to understand the business better to make that call. If there are easy ways to boost revenue, then the valuation makes more sense.
You can view the listing on MicroAcquire.
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Software for Cannabis Growers - $150k
For sale is 2-year-old software for small cannabis growers in Oklahoma that helps manage operations and compliance. Not a lot of detail in the listing.
Competitors: GrowFlow
Tech: NodeJS, Flutter, AWS, Firebase
Priced at $79/month
30-Day Revenue: $12k; Profit: $8k; Margin: 63%
TTM Revenue: $290k; Profit: $203k; Margin: 70%
Asking: $150k; Multiple: 0.74x
✔ What I Like
I like software solutions for niche businesses and emerging industries. There’s a PMF and nice revenue. Margins are strong. I think this is a simple tech stack. Sounds like there’s a large competitor in the space and this is a cheaper solution with similar features. Valuation is very cheap but maybe that’s a typo.
❓ Questions & Concerns
Not a lot of detail in the listing. Need to understand the regulatory issues that may come up with this business. If the asking price is correct, why is it so cheap? Is it limited to Oklahoma or can it be expanded nationwide? If seed-to-sale laws differ widely by state, this could be problematic. Seller says they’re stressed out by the business - which aspect?
You can view the listing on MicroAcquire.
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Real Estate Data for Investors - $20M
For sale is a 6-year-old SaaS that helps investors research real estate investments using big data.
Competitors: Reonomy, Biggerpockets, Airdna
Raised $900k in funding; Qualifies for Pipe financing;
15-person team; 1k - 10k clients;
30-Day Revenue: $219k; Profit: $32k; Margin: 15%
TTM Revenue: $2M; Profit: $129k; Margin: 6%
Asking: $20M; Multiple: 155.04x
✔ What I Like
Large TAM for this product as there’s consistent interest in real estate investing…
❓ Questions & Concerns
A 6% margin business asking a 155x multiple. I am going to coin a new term here - “MicroAcquired”. It’s when a seller decides to throw up some out of this world valuation on their business and lists it on MicroAcquire. We call this seller “MicroAcquired”. Don’t be like this seller.
You can view the listing on MicroAcquire.
— — — —
Software for Home Builders - $2.5M
For sale is a 25-year-old suite of software solutions for builders in Canada. The software provides builders with tools for managing every aspect of their operations, from estimating, to project management, cost control and automation of their business’ “day to day.” Seller is retiring.
Based in Ottawa, ON Canada
6-employees
TTM Revenue: $1.3M; Profit: $600k; Margin: 46%
Asking: $2.5M; Multiple: 4.17x
✔ What I Like
I like niche businesses. There’s a lot of operating history. Owner is retiring and may be willing to stay on with the business for a bit. I assume some seller financing is available. Subscription and maintenance revenue. Revenue has doubled in LTM.
❓ Questions & Concerns
Details require an NDA. I’d want to see if this business can be operated anywhere. Are the employees staying on? Is there any key-man risk? Typical SaaS questions like MRR, churn, pricing, and conversion would be relevant here.
You can view this listing on ProNova Partners.
🕸 Content/Marketplace/Service
Cleaning Service - $576k
For sale is a 5-year-old cleaning service business that offers customizable services to clients in Arizona, Colorado, and Florida. Services are booked through an online system.
4.3 star rating on Yelp
$1.7k CLTV; 17% CQGR (8/20 - 7/21); Recurring & one-time services;
TTM Revenue: $327k; Profit: $146k; Margin: 45%
Asking: $576k; Multiple: 3.95x
✔ What I Like
Localized niche service business with high margins. I think the business model is relatively simple here. Sounds like the sellers strategically chose those locations for the business. Would make an interesting acquisition for someone in a similar space or even someone just starting out.
High demand for home cleaning services…
CPC is around $6 - $7…
❓ Questions & Concerns
I wish there was more detail in this listing. Is this just a lead gen business or are there actual contractors who do the work? If the business has contractors or employees, then there are a lot of questions around hiring and employee turnover. If it’s just a lead-gen business then I’d want to understand competition, CAC, one-time vs. repeat clients, etc. What are the customer comlaints in the Yelp reviews?
You can view the listing on FE International.
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Luxury Goods Authentication - $1.8M
For sale is a 2-year-old online business that provides luxury goods authentication service to consumers and marketplaces. Detailed listing to see how this type of business operates.
Competitors: Getcheck
68 DR; 13k clients; 400k unique visitors/month;
15k e-mail list; 1k+ YouTube subs; 8.5k IG followers;
Partnerships with StockX, GOAT, Farfetch, Middle-East, FlightClub
Qualifies for financing with Clearco;
30-Day Revenue: $13k; Profit: $11k; Margin: 85%
TTM Revenue: $185k; Profit: $154k; Margin: 83%
Asking: $1.8M; Multiple: 11.69x
✔ What I Like
Very detailed listing with a lot of information. The fundamentals of the business look strong. The business is on-trend as the luxury resale market is only getting bigger (see below). Looks like they have partnerships with the right marketplaces to provide their services. Large e-mail list and social media following. Strong SEO position that lowers CAC. Includes a mobile app and a SaaS product that could be monetized. Priced for a strategic acquisition by someone who is already in this space.
❓ Questions & Concerns
Not a lot of operating history. The listing mentions that the conversion rate is very low. Only 500-800 new customers per month out of 300k-350k unique visitors. Competitors charge $0.75 for the same thing they charge $20. How sustainable is this? Valuation is up there. Interesting listing but for a very specific buyer.
You can view the listing on MicroAcquire.
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Staffing Agency - $12M
For sale is a 2.5-year-old software staffing agency that matches software engineers in South & Latin America with companies in the US on long-term contracts. “Just seeing what offers are out there”
Competitors: Turing
TTM Revenue: $3.7M; Profit: $1.2M; Margin: 32%
Asking: $12M; Multiple: 10.00x
✔ What I Like
Huge demand for software talent right now. Hiring remote from South America makes a lot of sense due to the similar timezone. Decent margins. Impressive how quickly this business was scaled. I think BairesDev is another competitor.
❓ Questions & Concerns
Staffing is a manual, people business. Not possible to automate. Not a fan of sellers that list their business just to see what offers are out there.
You can view the listing on MicroAcquire.
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Domain & Brand Marketplace - Open to Offers
🛠 Tools & Resources
These are tools & resources that I personally use. They may contain affiliate links so I’ll get a few shekels if you sign-up.
ProjectionHub - Access to 50+ CPA-developed financial projection templates. 25% discount.
PrivSource - Deal aggregator for lower and middle-market listings.
Logology - Best automated logo & brand identity tool I’ve come across.
DeepBench - Access a cutting-edge expert network. $200 discount.
OpenPhone - The best business phone solution that I have found. $20 credit.
Eloquens - Knowledge marketplace. I’ve bought a few guides and templates here.
That’s all for this issue of The Business Inquirer!
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Important Disclaimer: This newsletter is provided for informational & educational purposes only, and should not be relied upon as legal, business, investment, or tax advice. This newsletter may link to other websites and certain information contained herein has been obtained from third-party sources. While taken from sources believed to be reliable, it has not been independently verified. The Business Inquirer makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. References to any companies, securities, or digital assets are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any business, tax, or investment decisions. Content in this newsletter speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.