Business Start Date: 2013

Business Price: 3.1M USD

Sales (TTM): 442,668 EUR

Net Profit (SDE): 61,085 EUR

Business Multiple: Around 7X ARR

Paying Customers: 800 Companies/Entities

Traffic (TTM): 212,000 People 

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Summary

This Business is a 10 year old time tracking SaaS platform, used by 80,000 companies within the microsoft ecosystem - 800,000 hours are tracked every day and 350,000 projects have been tracked with This Business. This business is a simple and intuitive time-tracking software aiming to help companies become more aware of how they spend their time and resources. Given its scalable niche and the limits of the current owners, the business is being offered for sale so it can be taken to the next level. 

The Opportunity 

This Business was initially developed as an internal tool by an IT consultancy agency, to track project and client time, aid forecasting, budgeting, and invoicing. Recognizing the lack of suitable options in the market around 2014, the company decided to transform This Business into a SaaS product. Over time, it gained traction and steadily grew its Monthly Recurring Revenue (MRR) from zero to $35.6k, with a projected increase to $40k by the end of 2023.

A pivotal moment came in 2020 when This Business became the first time-tracking tool to integrate with Microsoft Teams. This integration opened up new avenues, leading to increased leads from companies using the Microsoft suite of tools. This success prompted the parent company to make a strategic shift by discontinuing their consultancy line of business and focusing solely on This Business. Additionally, This Business evolved its focus to become the premier time tracking software within the Microsoft Ecosystem.

This Business's current integrations with Microsoft Teams, Outlook, Microsoft Planner, and Microsoft Power BI showcase its commitment to seamlessly integrating with the tools these businesses are already using, streamlining their workflow and enhancing efficiency.

The business is offered as a turn-key acquisition at 3.1M cash for a new owner to come in with the current team (or a new one) and invest in the business for growth.

General Highlights

• A 10 year old Bootstrapped company with a revenues track record of 7 years

• 80,000 companies signed up since 2013 and are tracking 800,000 hours worldwide every day

• Top time tracking solution specializing in the Microsoft platform (and one of the first)

• Highly scalable as large growth opportunities by investing in marketing (growing $36k MRR currently)

Niche

This Business is in the Time Tracking Software market, catering to a specific market segment, companies that rely on the Microsoft Ecosystem who need to understand their employee’s work engagement activity. Any organization that relies on Microsoft's tools for communication, project management, productivity, and collaboration can benefit from This Business's specialized time tracking software.

Customer Base

The client base comprises around 800 clients in total. Among these, approximately 400 are freelancers or single users, while the remaining clients are companies or enterprises.

That means that 400 clients are paying $6 a month for 1 seat while the remaining 400 clients are paying for 2+ seats (anywhere from $14-2000 a month each).

There are currently 4,000 free users on the platform. 

This business’s client comes from all types of industries and has in common the tech stack (Microsoft). Some industries may find time tracking more relevant for their type of business and therefore they are most of our client base (Consultancy, IT, Marketing, Law, Engineering, etc.), but we see a lot of enterprise organization that are interested in a time tracking solution for internal analytics and business intelligence coming from all sorts of industries.

 Some of This Business clients include:

• Discovery Limited

• Paragon Communication

• Asics

• Sannam S4 Group

• ALD Automotive

• Ingenieria Valladares

Traffic

In the last 12 months, the business got over 212,000 visitors and millions of pageviews (as each visitor is typically very active with the site).

As you might expect, many of the visitors are from United States (23.68%), while South Africa (9.53%) and the United Kingdom (5.98%) were also represented.

As far as traffic source, the site has a diverse assortment which are all similar in impact to the business but across all the sites, the following 5 sources are leading the way in terms of traffic:

1. Direct - about 52% of traffic

2. Referral - about 22% of traffic

3. Organic Search - about 16% of traffic

4. Unassigned - about 4% of traffic

5. Paid Search -  about 4% of traffic

6. Cross-network - about 1% of traffic

7. Organic Social - about 0.28% of traffic

Overall, the business gets a large share of traffic directly from their website, given the business is a Time Tracking Software market, catering to a specific market segment, companies that rely on the Microsoft Ecosystem. There is also a App for the business but this gets used much less. 

Revenue Sources

The business generates revenue primarily through its This Business software product although the business has historical two lines of business; Consultancy and This Business.The Consultancy used to generate revenue for the company but starting from 2023, only a small portion of total revenues will come from this branch. This Business offers time tracking software to companies and freelancers within the Microsoft Ecosystem. As of now, most users pay a flat rate of $6 per user per month. This pricing model has been successful in attracting clients and building a steady revenue stream. 

In summary, the business primarily makes money through its This Business time tracking software and this main revenue stream involves charging users a monthly fee for accessing the software, with most users currently paying $6 per user per month. However, the company plans to introduce different plans with varying tiers starting from $6 per user per month.

Financials 

The current MRR is $36,200 and its growing to be at 40k later this year, so calculated ARR is MRRx12 = $434k. Here is the historical revenue breakdown:

Sales (EUR)

Profit (EUR)

Operations

The software is run purely on the cloud with all users using the website, web-application, or browser extensions for edge, chrome and firefox and mobile application for ios / android.

Leads and prospects get to know about This Business through:

-        Organic (Web search, Microsoft Teams Listing, Social platforms, etc.)

-        Paid advertising

Infrastructure is mainly distributed through Azure services. Software is developed in PHP (Laravel Framework) + VueJS (Quasar Framework).

We are currently migrating to a new codebase developed in the last 18-24 months to improve stability, scalability, and development agility.

The website platform and associated software manages all parts of delivering the customer the solution they pay for.

Team

The team structure of the business includes various roles responsible for different aspects of the company's operations. Here's a breakdown of the team members and their respective roles:

1. CEO:

• Responsibilities: The CEO oversees the overall activities of the company, providing feedback and guidance across different areas.

• Areas of Focus:

  • Marketing strategy

  • Product development and prioritization

  • Sales

  • Payroll and Accounting

2. Marketing (1 Person)

• Responsibilities: Implementing and optimizing the marketing strategy to attract and engage potential clients.

• Activities:

  • Organic Strategy: Blog post, links building and Social Media

  • Paid Strategy: Campaigns on Google Ads and Campaigns on LinkedIn

  • Support Touchpoint: Handling the initial support touchpoint, forwarding requests to the tech team when necessary.

3. UX/UI + Marketing (1 Person)

• Responsibilities: Primarily focused on user experience and interface design, along with contributing to marketing efforts.

• Activities:

  • Research and Design: Researching and designing new features to enhance user experience.

  • Marketing Support: Assisting with various marketing-related design tasks, including website pages, landing pages, resources, emails, and surveys.

  • Mainly activities include researching and designing new features.

4. Tech Lead (1 Person)

• Responsibilities: Leading the development team and overseeing technical decisions and resource allocation.

• Activities:

  • Technical Leadership

  • Infrastructure Management

  • Workflow and Policy Creation

5. Full Stack Developers (3 People):

• Responsibilities: These developers possess skills across the technical stack (Laravel, VueJS, SQL) and contribute to the development of the software.

• Activities:

  • Software Development

  • Technical Collaboration

6. DepOps (1 Part Time Person):

• Responsibilities: Managing and improving the technical infrastructure to ensure smooth operations.

• Activities:

  • Infrastructure Management

  • Upgrades and Improvements

Marketing

This business’s customers come from organic search and paid marketing for the most part.

They come from organic search (website, blog posts/articles, Microsoft teams marketplace listing) and from paid search (Google Ads, Bing Ads).

The paid marketing budget used to be around 50k€ / year. In 2022, 2023 it has been increased to take full advantage of the recovery and resilience of EU funds.

Partners

The only relevant 3rd party involved is the Microsoft ecosystem itself. This Business believes this is an opportunity considering the expansion strategy they have been using in the past years which promotes the involvement of third-party vendors in their marketplaces.

Partnering even more with Microsoft is the key for leveraging the company’s revenue growth and strengthening the market positioning.

Main Expenses

The main expenses are the ones related to the employees ~ 270k $/year.

Other relevant expenses:

-        Advertising (~45k$/year)

-        Office (~45k $ / year)

-        Consultants (Accountant, payroll, legal, and others ~18k$/year)

-        Software Licenses (~23k$/year)

-        Hosting (currently free thanks to Azure credits, will be ~18k $/year)

Work and Skills Required

The owner currently has the following responsibilities:

1. Oversees overall company strategy

2. Handle demo/calls with big clients/opportunities

3. Handle accounting/payroll

4. Oversees marketing activities

5. Give feedback and oversees product feature prioritization

Who is the ideal buyer for this business?

Given the model, industry, and multiple, the potential buyer for this business could be both strategic and private equity buyers as the business would have a lot of use for another business in the B2B efficiency space but the financials are attractive enough to fit into a PE model.  

Strategic may be more ideal because they could more positively impact the growth of the company. For example an ideal strategic buyer could be a company that is already positioned in the Microsoft space and may be interested in expanding their portfolio with a tool that is positioned in the same field.

Or could be a company that does not have a strong offer in the Microsoft space and may want to start doing that by acquiring a vertical solution capable of attracting customers from the Microsoft Ecosystem.

Financial buyer on the other side, can be interested in two different ways:

-        Cutting costs and getting good margins;

-        Increasing strategic spend in tech/marketing investment in the next 2-3 years to increase revenues.

What (if any) post sale support is included with the sale?

If requested, the CEO and CTO can stay on board for 1-3 years after sale to help the business. This depends on the agreement that we will reach. Ideally, we can help the transition to the new owners while continuing developing and improving the product.

Valuation

The price was determined as around a 7x multiplier of the current ARR.

SEO Analysis (Ahrefs)

Authority Score: 66

Backlinks: 3.3K (40% dofollow)

Referring Domains: 835K (63% dofollow)

Social Media 

Twitter -  712 followers
Facebook  -  230 followers

Instagram -  104 followers
LinkedIn -  467 followers

YouTube - 23 subscribers

Expansion Opportunities for New Owner

The new owner can expand the business and opportunity by

1. Increasing prices, the current price is relatively low, considering the type of clients and the budget they have. We already plan to increase prices by creating multiple plans, where the cheapest would be the current price for all clients ($6 per user per month)

2. Cutting costs and keeping the company in maintenance mode, could easily get the company reach good operating margin

3. Creating an affiliate program and create a partner network that can sell This Business

4. Increasing features and improving product, increasing the positioning gap between the competition

5. Increasing and improving the marketing efforts (Organic, Paid)

Barriers to Entry

The market is saturated with time tracking and project management solutions. Finding the right positioning and creating a gap between the new product and the competition requires time, money and risk.

The money needed to start a business and reach similar results are far better spent on directly acquiring a running company, with proved skills and competencies and that, with good guidance and networks, could easily reach hypergrowth opportunities.

Reason for Sale

The company is led by minor shareholders that are looking for greater opportunities. Selling the business could be an opportunity to monetize the shares and get involved in the company’s next steps with the buyer. The company is currently all Italian and getting bought by an international player could be a great growth opportunity.

The original founders own the 75% of the company and are no more involved in the daily operations, therefore are interested in monetizing with an exit.

The company is owned as follows:

-        75% by the parent company (the original founders of the company

-        17% by CEO

-        8% by CTO

Both the CEO and CTO may be interested in staying on board after the acquisition.

Miscellaneous Details

We won ~350k € in grants from the Italian government related to the Recovery and Resilience Plan. We are going to receive a cashback related to marketing advertising costs and the development of an AI algorithm for automatic time tracking.

To sustain the cashflow and the costs of the investments we had to make loans (36-months) for a total of 250k €.

The reimbursement will be provided by the government in 2024 – 2025 – 2026.

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All Assets Included with Sale 

All assets of the business that are necessary to run and grow it, will be included, including but not limited to:

1. Domains 

2. Website and all content

3. Proprietary Software 

4. All customer bases

5. Hosting Accounts

6. Monetization Accounts 

7. Social Media Accounts

8. Work contracts 

9. Future Sales

10. Customer Contracts

11. Partner contracts 

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About the Agent 

FIH.com is a Manhattan-based M&A advisory firm specializing in the sale of SaaS, eCommerce, & Digital Media companies from $1M-$100M. If you are in the market OR you are looking to exit a business that fits these specifications, then we encourage you to reach out to us for a free consultation.