Tagline: 10 year Fintech Payments Platform with 200,000 users and $200M+ processed on platform last year

The Opportunity 

This listing is for a 10 year old B2B SaaS company (with a freemium model) that offers a full service fintech payments platform that helps 200,000 companies invoice, take payments, manage vendors, and integrate their accounting. One of the largest open-source Fintech platforms with one of the largest number of payment gateway/merchant service integrations of any invoicing platform as well one of the largest # of languages & currencies of any invoicing platform. Over $800k in ARR (with a high profit margin) with a lot of growth opportunities for new owner - this business is being sold turnkey owners available to stay with the business.

General Highlights

• Highly regarded 10 year old B2B SaaS company offering a full service fintech solution

• 200,000+ users including 8,700+ paying companies on recurring contracts

• Over $200,000,000+ in credit card payments processed on the platform in 2022 alone and magnitudes more in other business payments

• Unbelievably strong backlink profile connecting its open source software to most major tech companies and fintech solutions (Google, Microsoft, Apple, DigitalOcean, etc.)

Niche

This business was built to serve freelancers and small-businesses with a complete suite of invoicing & payment tools to advance their business. Taking a premium fin-tech platform approach, the business offers a dynamic system to address all sorts of business’s invoicing and payment needs.

Offering a freemium SaaS platform, the business is able to take market share from beginning and established companies by introducing them to their basic software when they can’t afford the full version and then being able to upgrade them when their business scales. This has allowed them to support a diverse ecosystem of users without spending hardly anything on marketing as the freemium model attracts users naturally via word of mouth and search. 

Customer Base

There are over 200,000+ users on the platform with over 25,000 active each month and the platform gaining +/- 4,000 users each month. Here are these numbers broken down:

135,000+ total SaaS Users (including 6,200 paying users)
65,000 Total Self-hosting (open source) Users (including 2,500 paying users)

45%+ US based users. All other counties are single digit % for users.

SaaS Paying Users (broken down)

2,210 Pro, monthly members
1,989 Pro, yearly members
924 Enterprise, monthly members
1,079 Enterprise, yearly members

Traffic

To start, all traffic is 100% organic, driven by users via SEO, word of mouth, and more. Analyzing the traffic from a technical Google Analytics perspective gives us the following data:

1. From June 1 2017 to June 1 2023, there were 5,721,685 users who produced 16,153,866 sessions and 75,342,133 pageviews at a low bounce rate of 44.6% and an average session duration of 5:07 minutes.

2. In the last year (from June 1 2022 to June 1 2023, there were 2,054,643 users who produced 3,391,394 sessions, representing 12,236,172 pageviews with an even lower bounce rate of 26.33% with 3:35 minutes as the average session duration.

3. Regarding demographics over the last 6 years, about 60% of users are between 25-44 and about 26% are over 44 while 14% are under 24. 

4. Regarding gender, about 63% of users are male while 37% are female.

5. Regarding language, 88% of the website traffic are English speakers.

6. Regarding location, over 31% of website traffic is coming from the US but most of revenue is coming from there 

7. Regarding traffic sources, 77.1% of users are coming direct, 13.6% are coming from organic search, 7.9% are from referrals, while the tiny portion left came from social, email, and some paid search (from long ago).

8. Due to the open source nature of the software, the site attracts some bots (from Russia, etc.) so a much higher percentage of the traffic is coming from USA.

Revenue Sources

This business works on a traditional freemium SaaS model with 3 main revenue sources:

1. Pro & Enterprise Plans range: $10 - $44/ month (86% of revenue)

   1. Free Users upgrade to premium plans to access advanced features, unlimited data, add additional account users, and remove the This business branding from invoices & client-facing pages.

2. Self-Host White Label: $30/ year (10% revenue)

   1. Users who self-host their own installation can ‘white-label’ (remove This business logo) for $30/ year.

3. Reseller Licensing: $10,000/ year (4% revenue)

   1. We offer a white-label version of This business for SaaS "resellers" to launch a rebranded invoicing platform. The reseller license is a flat fee of USD$10,000/ yea?r?.
       

Financials

For full details, please review profit and loss statement but here is a summary:

Sales

2020: $512,749

2021: $627,613

2022: $792,883

2023 Q1: $225,266 ($353,336 through May)

SDE

2020: $372,562

2021: $487,767

2022: $611,640

2023 Q1: $135,000

Operations

We are a small team, everything is stream-lined for efficiency. The 3 partners share the load for customer service via: email, Slack, Discord, community forums. It is very manageable, support is not a resource burden and we don't use any ticketing system/not needed.

Team

We are a small team, 5 people total:

• Person 1, Co-founder, CEO. I handle everything on the financial side, business, marketing, etc... basically everything outside of development.

• Person 2, Co-founder, Lead Developer - handles all front-end development.

• Person 3, CTO - handles all backend development.

There are 2 junior developers based in Bosnia-Herzegovina who work under person 3.

The 3 partners share the load for customer service via: email, Slack, Discord, community forums. It is very manageable, support is not a resource burden and we don't use any ticketing system/not needed.

Marketing

The business launched in early 2014 and have grown 100% organically/ bootstrapped since.

Through this slow and natural progression of the business, it has received many important backlinks from other websites referencing their software in a positive manner - reviewing why businesses would choose them over the competition.

These platforms drive users and traffic to the business promoting long term value exchange and a sustainable lead generation system.  

Proof of this is seen by a 74 Ahrefs score with 102,000+ backlinks with 59% that “dofollow” and 3,200+ linking websites with 62% that “dofollow”.

Partners

The business benefits from its platform being open source so it is promoted/distributed by a number of notable tech companies including Apple, DIgitalOcean, Google, GitHub, Microsoft, Make.com, AppSumo, Authorize.net, OVH, PayPal, Stripe, WePay, Godaddy and many more. Just Google the company and see all of the notable links that come up.

Main Expenses

Partners salaries are the main expense (75%), the company is extremely streamlined and only 25% of revenue is needed to operate the business.

-P&Ls' categorize the company's [3] partners’ pay as "Programming (Senior Partners)" and "Administration".

-The 3 partners take 75% of all revenue to intentionally "zero out" the company LLC P&L report each year for taxation. For example:

2020 revenue $512,749. Partners pay $372,562. = 73%.

2021 revenue: $627,613. Partners pay $487,767. = 78%.

2022 revenue $792,883. Partners pay $611,640. =75%.

2023 Q1 revenue $225,266. Partners pay $135,000.

*Thus the operating cost of the company is +/- 25% of revenue, the other +/- 75% of revenue is profit issued to the partners as pay & bonuses. 

Who is the ideal buyer for this business?

Given the broad fintech angle of this company, really any comparable vertical could produce a buyer that might have a lot of strategic benefit in acquiring this company - hosting companies, invoice factoring/financing companies, merchant processors, complimentary apps (CRMs, Workflow management, document management), fintech apps, financial service providers. For these companies, adding the user base of This business to their company or adding This business’s software to their own customer base could produce a synergy worth tens of millions or more. 

For a private equity fund with a diversified portfolio, this would also make a great ROI scenario for a variety of situations, including converting the free user base to fully paid contracts.

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

The 3 partners are open for a medium-long term “acquire hire” scenario, as the buyer prefers. Given owners are operators in this business, they are willing to sell the business and stay on long term or just until they can find and train replacements for themselves, depending on the buyers preferences and needs. They are willing to maintain a small portion of equity to maintain the right incentive structure for themselves if they are to stay on running it for the long term.

All this said, the business is in an optimized state where the software is doing all of the work and the owners are just doing basic admin, developing, and customer support which should be able to be outsourced quite easily. 

Valuation

The valuation may seem to be a higher multiple of 12X ARR but it is really only a small fraction of the hundreds of millions of funds processed by the business. The business processed over 200M in credit card payments in 2022 alone and did a magnitude higher in the actual of invoices processed but only the credit card ones are tracked at this level since the business directly manages these.

Outside of this, the business has had hardly any investment into marketing or took really any risks to expanding. So the new buyer could try to force convert just 10% of the 191,300 free users at an average of $20/month, that would produce an additional $4,591,200 in ARR or if the business started taking a percentage of payments processed on the platform, they could expand their revenue even further. 

Besides this, the strategic value of this business in the hands of another fintech company (or relevant company) would be immense for cross-selling softwares and integrating user bases.  

SEO Analysis (Ahrefs)

Authority Score: 74

Backlinks: 102,000 (59% dofollow)

Referring Domains: 3,200 (62% dofollow)

Ranking Keywords: 2.6k

Expansion Opportunities for New Owner

For some simple ideas of how to build more revenue and market share, you can expand this business by:

1. Increase prices 

2. Take higher percentage of commission on transactions

3. Cross-selling the user base into new niches like factoring.

4. Try to convert large free user base into paid

5. Start investing into advertising

Barriers to Entry

Reputation in this industry is hard to earn and takes many years and many customers trying your software. This business has had 200,000 companies test out their business and this brand is in their mind.

Outside of trust and brand recognition, it would be very hard to engineer such a full service fintech platform as this as it is much more complex than just software … many agreements need to be set up for payment processing, distribution, etc. which provide an even greater barrier to entry for new businesses.

Reason for Sale

The owners reason for sale is consistent with other technology companies where there are multiple owners and they have all been on board for some time. In the owner's words, they have been building the company for 10 years and they would all like to see a nice exit and ideally employment contracts. They are also open to a majority stake of the company and staying on as minority shareholders.

Miscellaneous Details

Every part of the business is run remotely so the new owner can be anywhere. Given the US presence of the business, you may qualify to take out financing to acquire it. 

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All Assets Included with Sale 

1. Domains - See Google Drive Data Room

2. Website and all related content

3. IOS and Android Apps

4. All vendor contracts 

5. All distribution contracts and accounts 

6. Proprietary Software: 10 years development: https://github.com/This business/This business

7. All customer bases: 200,000+

8. Hosting Accounts: Cloudflare, OVH

9. Social Media: YouTube, Facebook, Twitter, Discord, Github, Docker, LinkedIn, CrunchBase, Capterra, etc..

10. Work contracts: No employees, freelancers only, see Google Drive Data Room “Material Agreements”

11. Customer Contracts: All SaaS monthly & annual users.

12. Partner contracts: Stripe, WePay, Authorize, PayPal, AppSumo, Make.com, Zapier, App Store, Google Play, similar.

13. All other business assets used to start, manage, and develop the business.