The Business Inquirer #066
The Business Inquirer #066
In this week's issue, I highlight six listings including an arts & crafts brand, an Etsy SEO tool, a crypto payment service, and more.
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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Hello Friends!
In this week’s issue:
🛒 eCommerce - 1 listing
☁ SaaS - 3 listings
🕸 Content/Service/Other - 2 listings
🛠 Tools & Resources
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🛒 eCommerce
Private Label Shopify Brand - $500k + Inv
For sale is a 4.5-year-old Shopify site/brand that sells a line of it’s own trademarked, private-labeled products focused on the arts and craft niche.
2,500 SKUs; 900k e-mails; 344k unique monthly visitors; 3M pageviews;
Started off as dropship model but now trasitioning into a US-based 3PL
TTM Revenue: $4.9M; Profit: $285k; Margin: 6%
Asking: $500k + Inv; Multiple: 1.75x
✅ What I Like
Arts and crafts has been a very fast-growing niche over the last few years. Below I’ve copied the subscriber growth for the r/crafting Subreddit. The store appears to have very strong traffic with 344k unique monthly visitors. The 900k e-mail list offers a lot of remarketing opportunities. Valuation appears reasonable.
❓ Questions & Concerns
The main concern here is the very low margin. This would make sense if it’s a dropshipping model but since they have a 3PL, that margin should be much higher. How’s the transition going? Perhaps they’re driving most of the store traffic through paid channels. I’d want to know how they’re using their e-mail list. For all e-commerce stores you want to understand how the supply chain issues have impacted them as well as the increasing costs of digital advertising.
You can view the listing on Quiet Light Brokerage.
☁ SaaS
SEO for Etsy - $120k
For sale is 1.5-year-old Crest which helps Etsy merchants with SEO, listing optimization, and sales insights.
Competitors: eRank, Marmalead
SaaS model at $12.99/m;
TTM Revenue: $20k; Profit: $15k; Margin: 75%
Asking: $120k; Multiple: 8.00x
✅ What I Like
I see plenty of Shopify and Amazon solutions for sale but haven’t come across too many that serve Etsy merchants. It’s an interesting market that is growing. Similar to Amazon, Etsy is all about optimizing the listing to show up in the correct search results. This tool appears to help with that. There’s decent traction with around 123 paying merchants using the product. Strong search volume and $3.50 CPC isn’t bad.
❓ Questions & Concerns
Tough to think about valuation in these types of early businesses. Are there good reviews and social proof for this product? That’s typically the moat. What’s the client churn? You have to build affiliate relationships and focus on SEO to grow this product.
You can view this listing on MicroAcquire.
— — — —
CRM & Sales Analytics for Cannabis - $350k
For sale is a 5-year-old SaaS that provides a CRM and sales analytics solution to legal cannabis businesses. Currently only operates in WA state.
Competitors: Cultivera, GrowFlow, Headset, TopShelf
Facilitates 20% of transactions in WA
TTM Revenue: $28.5k; Profit: $21k; Margin: 74%
Asking: $350k; Multiple: 16.67x
✅ What I Like
This is a tech/product built business that could be an interesting acquisition for someone with a sales/marketing skillset. The power of these businesses is in the data that they collect. Think GfK/Nielsen but for cannabis. I believe Headset is the current leader in this space.
❓ Questions & Concerns
Valuation is pretty rich here. There’s a lot of work to do in order to scale this thing including building out additional features to make it compliant with other States regulations.
You can view the listing on MicroAcquire.
————
AdTech - $300k
For sale is a 7-year-old AI-powered AdTech SaaS that allows advertisers and agencies to optimize their advertising ROI. Special situation.
Competitors: PWC, Deloitte, Ebiquity, Integral Ad Science, Double Verify
60% of sales are going away due to key relationship ending;
5-person team focused on tech/product;
TTM Revenue: $550k; Profit: $210k; Margin: 38%
Asking: $300k; Multiple: 1.43x (3.57x est)
✅ What I Like
They estimate that 20-40% of ad spend is wasted on incorrect or fraudulent ad placement. This SaaS helps identify and prevent that. The product could be sold to agencies and advertisers which is a large TAM. Built by a tech/product team that doesn’t have biz dev. The team can stay on. Some large competitors to learn from and exit to.
❓ Questions & Concerns
Key US relationship is ending and 60% of sales are going away. Need to understand why. What’s prevented this product from achieving more scale/revenue? How easily could that revenue be replaced?
You can view the listing on MicroAcquire.
🕸 Content/Service/Other
Digital Marketing Agency - $480k
For sale is a 16-year-old web design, SEO, and social media marketing agency. Based in Canada but operated fully remote.
Service automation system in place; Written SOPs;
Diversified customer base and low customer concentration;
7-remote employees in place including management team that runs everything;
Owners spend 8-10 hours per week on the business;
TTM Revenue: $466k; Profit: $156k; Margin: 33%
Asking: $480k; Multiple: 3.08x
✅ What I Like
I like these types of evergreen online service businesses. They can throw off a lot of cash flow if done right. This agency seems to have a lot of systems and personnel in place to be able to function smoothly without too much owner involvement. The fact that it’s been operating for 16 years offers differentiation and a good marketing pitch. Would be great if there are a lot of positive online reviews. Valuation is reasonable.
❓ Questions & Concerns
Can be hard to scale due to high employee turnover and general difficulty in hiring. Very competitive space. These types of businesses also require a lot of due diligence to figure out client churn, acquisition, employee contracts, etc. I’ve heard horror stories of buying a marketing or web dev agency and then having all the employees leave.
You can view the listing on BizBuySell.
————
Cryptocurrency Payment Service - $15M
For sale is a 6-year-old service that allows merchants to easily accept cryptocurrency as payment for their goods/services.
2 freelance developers in place; Owner works 5-7 hours per week;
TTM revenue: $22M; Profit: $3.6M Margin: 16%
Asking: $15M; Multiple: 4.17x
✅ What I Like
I normally stay away from any business that’s selling supplements or financial products. The reason I’m adding this listing is that it comes from Quiet Light Brokerage who has a reputation for doing extensive vetting of their listings. Meaning, they wouldn’t list a scam (at least I don’t think so).
I think this business is in a great niche as more and more merchants will need to start accepting crypto. Sounds like this is a lean operation with just the owner and two freelancers. Interesting to see that they haven’t spent anything on marketing. Clearly, this type of business will appeal to someone who is already in this space. Maybe it’s a bolt-on to a payment processor that is lacking this functionality.
❓ Questions & Concerns
I wish there was more detail in the listing as I’d love to have a better understanding of how this thing operates and who the clients are. Once you start spending money on advertising, those margins will drop significantly. There could be regulatory risk here.
You can view the listing on Quiet Light Brokerage.
🛠 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.
Cerebro Capital - Cerebro has a network of 1,500+ lenders who can provide debt financing for your acquisition, refi, etc. $500k minimum.
Curators - Proprietary deal sourcing. You need targets that fit your investment criteria, and Curators delivers week after week - we even update your personalized database on a daily basis with new information on best-fit targets.
BizNexus - Proprietary deal flow, deal aggregator, and exit prep.
PrivSource - Deal aggregator for lower and middle-market listings.
Calendly - Leading scheduling platform to easily schedule meetings without the back and forth. I’ve been using it for several years now. Free 14-day trial.
ProjectionHub - Access to 50+ CPA-developed financial projection templates. 25% discount using code “duedilio” at checkout.
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.
Deal Sourcing Guide - A directory I put together of online marketplaces, brokers, DFY deal flow, and more.
That’s all for this issue of The Business Inquirer!
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