The Business Inquirer #055
In this week's issue, I highlight seven listings including a security camera dropship business, podcast production SaaS, and a COVID testing directory.
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.
Let’s connect: LinkedIn, Twitter, Facebook Group, Calendly
Hello Friends!
I have some holiday travel this week and next so I apologize in advance if there’s a bit less content over the next two or three issues.
In this week’s issue:
🛒 eCommerce - 1 listing
☁ SaaS - 3 listings
🕸 Content/Marketplace/Service - 3 listings
🛠 Tools & Resources
This issue of The Business Inquirer is brought to you by DueDilio.
DueDilio is a due diligence concierge connecting business buyers and private investors with quality, pre-vetted due diligence service providers.
Our deep network of 150+ independent professionals, boutique and mid-size firms, and subject-matter-experts enable us to address finance, technology, legal, operations, marketing, and other diligence projects.
Submit your project. Review qualified proposals. Hire diligence provider.
🛒 eCommerce
Security Camera Dropship - $320k
For sale is a dropshipping business that sells commercial-use security cameras.
Target markets are installers & IT professionals
TTM Revenue: $500k; Profit: $90k; Margin: 18%
Asking: $320k; Multiple: 3.56x
✔ What I Like
I think dropshipping is a great business model, especially as a first business. Margins here aren’t bad for this type of business model. I like that this isn’t a B2C business so there are fewer support issues and returns to deal with. Demand for security cameras is increasing.
❓ Questions & Concerns
Not a lot of detail in this listing. Have to understand the supplier relationships and who is responsible for returns/support. How are clients acquired? Dropshipping businesses typically trade for lower multiples due to their low margins and other factors. This multiple seems elevated. What are the growth levers?
You can view the listing on BizNexus.
☁ SaaS
Task Automation for Sellers - $3.2M
For sale is a 4-year-old automation SaaS for eBay and Amazon sellers in NA and Europe. The solution uploads tracking numbers, sends automatic messages to clients, helps build attractive titles, and more.
Competitors: DSMTool
$511k ARR; 5-person team;
TTM Revenue: $491k; Profit: $396k; Margin: 81%
Asking: $3.2M; Multiple: 8.08x
✔ What I Like
Some operating history. Great margins. I think this solution is most relevant for drop shippers but I could be wrong. Large TAM.
❓ Questions & Concerns
Is the team staying on with the new owner? What are the sales and marketing channels that have been successful? How is this solution different than the competition? I don’t see a lot of search volume for the competitor. Valuation seems high.
You can view the listing on MicroAcquire.
————
Podcast SaaS - $1.6M
For sale is a 6-year-old SaaS that is used to record, edit, and publish podcasts.
Competitors: Anchor, Libsyn, Google Hangout, Skype
5.1% churn; 11% trial to paid conversion; $213 CLTV;
TTM Revenue: $209k; Profit: $178k; Margin: 85%;
Asking: $1.6M; Multiple: 8.99x
✔ What I Like
A lot of operating history. Podcasts are gaining in popularity with over 2M podcast shows being produced. The churn and conversion metrics are a bit better than industry averages. Great margins.
❓ Questions & Concerns
A lot of competition in this space. Margins are high because all growth has been organic. This is a double-edged sword. Organic growth is great for young businesses but after 6-years I’d prefer to see a business that has a clear marketing plan, distribution channels, CAC calculation, etc. Valuation is very high.
I’m curious to get your thoughts on this. Would you prefer a 6-year-old SaaS with all organic growth or would you prefer one where you know CAC (all else being equal except margins)?
You can view the listing on MicroAcquire.
— — — —
AI Scheduling - Open to Offers
For sale is a 1-year-old micro-SaaS that is a scheduling solution that uses ML and NLP. It syncs with Gmail and Outlook.
Competitors: Calendly, Doodle, HubSpot
150 free trial users; 3-4 signups per day;
All revenue so far generated from AppSumo
TTM Revenue: $15k; Profit: $15k; Margin: 100%
Asking: Open to Offers
✔ What I Like
I personally think that there are many ways to improve the scheduling workflow compared to how it’s done today with Calendly and other similar solutions. No clue if this is a better alternative. Built by a software agency so I have to assume that the tech stack is solid. People are actively looking for these types of solutions. There may be an opportunity to niche down.
❓ Questions & Concerns
There is a lot of competition in this space. You need NLP and ML know-how to support this software. You’re buying software and not a business yet. There’s no customer acquisition plan or understanding of CAC. CPS is very high (see above). I think it’ll be tough to figure out a valuation and have the seller agree.
You can view this listing on MicroAcquire.
🕸 Content/Marketplace/Service
Tech Recruiting Marketplace - Open to Offers
For sale is a 4-year-old marketplace that matches startup and tech companies with job-seekers in emerging tech markets (Detroit, Columbus, Indy, etc).
Competitors: Builtin, Hired
10-person team;
TTM Revenue: $600k; Profit: $283k; Margin: 47%
Asking: Open to Offers
✔ What I Like
Listing mentions that they’re the largest community focused on emerging tech hubs. I assume they have a first-mover advantage. A lot of growth potential by expanding to more cities, offering value-added services. Decent margins. One of the hottest areas of job recruiting.
❓ Questions & Concerns
With remote work, is this startup relevant anymore? Good question in general - are location-specific job boards a good business to be in? 10 person team seems large for this type of company and revenue. How large is their community and e-mail list?
You can view the listing on MicroAcquire.
————
Content Website for Mothers - $465k
For sale is a 7-year-old content website and (upcoming) e-commerce store focused on mothers. The website has hundreds of articles, DIY tips, and advice for mothers.
540k followers on Pinterest; 190k on Facebook;
TTM Revenue: $123k; Profit: $116k; Margin: 94%
Asking: $465k; Multiple: 4.01x or 48x
✔ What I Like
I like these types of niches with a large, engaged audience. Listing mentions a focus on SEO and a high authority score. Love the plan to monetize the audience through their own Shopify store. The listing mentions that the products and branding for the store are ready. The margin is high but have to know how that’s calculated.
❓ Questions & Concerns
Not a lot of detail in this listing so leaves a lot of questions. You want to understand the level and quality of the traffic, any issues with Google updates, engagement, etc. Not sure why the listing wouldn’t even mention the traffic numbers. Valuation is very high. Is new content being added?
You can view the listing on AppBusinessBrokers.
— — — —
COVID Testing Directory - $2.5M
For sale is a 1-year-old website that is a global COVID testing directory built on WordPress. Revenue comes from subscriptions, API, and display advertising. Not sure I’d buy this business but a great example of solid execution.
Ranked top 3 for high-end keywords; Featured in news outlets;
Diversified revenue from API, subscription, and display advertising;
Built on WordPress;
30-Day Revenue: $45k; Profit: $40k; Margin: 89%
TTM Revenue: $552k; Profit: $500k; Margin: 91%
Asking: $2.5M; Multiple: 5.00x
✔ What I Like
Of course, the devil is in the detail but what a great business built in just a year. Simple tech stack, clear problem, multiple revenue streams, great margins.
❓ Questions & Concerns
Clearly, this business relies on COVID being top of mind. I think the Google algorithm updates could also have an impact here. Very risky business to purchase in my opinion. You’re clipping a 20% coupon but making a bet that COVID will be an acute issue over the next 5+ years. Interesting listing.
You can view this listing on MicroAcquire.
🛠 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.
BizNexus - Proprietary deal flow, deal aggregator, and business exit prep.
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.
Deal Flow Scout - peer-to-peer deal flow exchange. Free, open, transparent.
That’s all for this issue of The Business Inquirer!
Help us improve with anonymous feedback. How did you like this issue of the newsletter?
If you enjoyed reading this newsletter, why not share it?
Let’s connect: LinkedIn, Twitter, Facebook Group, Calendly
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.