ABOUT THE CLIENT
Our client was a US-based Online Tax filing company looking for a Vertical expansion by way of adding a SaaS product into the company portfolio.
The acquisition had to be a logical product extension to be able to address the immediate market opportunities with the current clientele. At the same time be able to flip the revenue model to a linearly scalable one versus the existing one-time or subscription-based revenue model.
We were able to identify a Startup that met the key Acquisition criteria. The company had an enterprise product in the B2B space and had a product portfolio fit. The company was evaluated for technology and product capability, organization and management capability, proof of established product and clients.
OUTCOME OF CASE 01/21
Acquired with Size of the Deal being Approx. $200K (Excluding ESOPs)
- Understand the Acquirer’s interest and focus
- Evaluate the acquisition target on Product, Team and Business
- Work on a valuation method that suits both the Acquirer and the Startup
FREQUENTLY USED VALUATION METHODS
- Market Multiplier on Sales or EBITDA
- Cost-to-Duplicate for early-stage Startups (pre-revenue and 1-2 into revenue generation)
- NPV/DCF for healthy (with sound EBIT) Services companies
- Hybrid method
- Case Number:
- 17 June 2021
- Sunita Kumari
- A visitor management product focused on commercial establishments.
- Founded In:
- Sold In:
- Funds Raised:
- Through Friends and Family
- Revenue generating with ongoing clientele.
- Approx. $ 0.5M with 2 enterprise and 20 SMB customers.
- Asset Acquisition:
- Product + Team
- Valuation Deal type:
- All Cash Deal
- [EV = 2.5x Sales (Topline) + Product development Cost + 1 Yr. sales projection]
- Special Conditions:
- Joining Bonus for the Technology Team and ESOPs for the founders