Business Created
October, 2019 - (5 years old)
Listing Number
Listing Price
Monthly Revenue
Monthly Net Profit
Cashflow Volatility
Cash Yield
Business Name: Confidential
Location: USA (but operated out of South Africa)
Business Start Date: 2019
Business Price: 3M USD
Sales (TTM): 892,661 USD
Net Profit (SDE): 225,929 USD
Business Multiple: around 3.36x ARR
Clients: 31
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The Opportunity
This listing is a 4-year-old highly scalable digital marketing business serving the B2B cold email market. The business helps companies with email outreach as their main service - in this, they have a high-touch full-service software process to service this niche, which is in demand for any sales-forward organization. The potential buyer has the opportunity to acquire a respected brand with a solid financial foundation at a competitive multiple of less than 3.5X the ARR.
General Highlights
This 4-year-old business is equipped with an innovative product, a reliable customer base, and a finely-tuned operational system.
The business already is steadily growing year over year to almost 900k ARR currently and has plenty of new growth opportunities -
The business has a credible industry presence and it is well-regarded and trusted, giving the buyer an immediate competitive advantage.
The business boasts a steadily expanding customer base of over 31 companies with a decreasing churn rate, ripe for long-term customer retention.
Niche
This business operates in the digital marketing and communication space where it serves the B2B cold email market segment for companies seeking help managing their email campaigns as well as other agencies looking for a white-label solution
Customer Base
The company has 31 clients from a broad range of industries with the majority being VCs, ICT, Software devs, Marketing and Advertising, and Corporate gifting.
Traffic
For the period of January 2020 to October 2023, the company has 23K users with a 64.93% bounce rate and 59,463 pageviews.
In terms of demographics, 10,008 users are from the United States, which corresponds to 43.37% of all its users. Others are from South Africa (3,022 users), and the United Kingdom with 2,168 users.
The business' user acquisition is as follows:
Direct - 15,574
Organic Search - 5,376
Paid Search- 995
Social - 846
Referral - 284
Other - 21
Revenue Sources
The business makes money through the sale of various cold email packages that differ primarily on the basis of the number of email sequences that are offered.
All of its packages are performance-based and tailored to its 50+ clients' unique service needs and requirements. Pricing plans are Emerge, Embark, Envision, and Explore - with Embark being the most popular plan.
Custom plans are also available. All plans have discount options applicable if the client is willing to make upfront payments/subscriptions.
Financials
The company’s revenues have been steadily increasing since its inception in 2020. It has achieved a CAGR of 184% to date. The business has been profitable but has not yet achieved its full potential as over the recent couple of years, the emphasis has been on developing a viable product, augmenting operational systems, and hiring key employees to bring technical stability and drive growth. Gross profit margins have averaged 76% while operating profit margin was 12.4%
Sales (USD)
2021 - 119,108
2022 - 506,579
2023 - 812,575
Profit (USD)
2021 - 18,692
2022 - 96,619
2023 - 19,800
Operations
The business augments its client's sales teams by being the experts in cold outbound sales. By scaling up its infrastructure, the company has enabled its clients to generate revenue-generating conversions. Their backend and front-end processes are handled by a combination of people and software to deliver the results customers want.
Backend processes (done by people)
Email infrastructure setup
Apollo account setup
Dashboard setup
Apollo account maintenance
Reply categorization
Backend processes (done by software)
Sending of emails
Collection and storage of campaign data
Frontend processes (done by people)
Communication and interpretation of campaign performance
Front End Processes (done by software)
Dashboarding of data
Team
This company’s team is as follows.
Person 1 - CEO & Founder
Person 2 - Co-Founder & COO
Person 3 - Co-Founder and Head of Strategic Partnership
Person 4 - Commercial Director
Person 5 - Software Developer
Person 6 - Front End Developer
Person 7 - Senior Account Manager
Person 8 - Finance Manager
Person 9- Client Service Lead
Person 10 - Account Executive
Person 11 - Account Executive
Person 12 - Head of Customer Services
Person 13 - Email Strat & Analytics
Person 14 - Email Strategist
Person 15- Sequence Manager
Person 16- Data Scientist
Person 17- Head of Copy
Person 18 - Operations Assistant
Marketing
The business relies mainly on its own prospecting software, LinkedIn, Google Ads, and its website in terms of marketing efforts. Another channel is through referral partners. It is a marketing company so this part comes naturally.
Partners
Some of the shareholders are significant referral partners. The company runs a referral program targeted at its current clients to create a network effect on sales.
Main Expenses
The main expenses are employee costs, cold email software subscriptions, and outsourcing third-party consultants. See the financials for more details.
Work and Skills Required
The CEO is the major shareholder of the business and is also involved in sales generation. Additionally, he oversees operations and product development in terms of:
Adding listings
Paying partners/employees
Optimizing advertising
Who is the ideal buyer for this business?
The business has evolved to a stage where it does not need to heavily depend on its owner to continue operating, hence any investor with an interest in this space could be an ideal buyer. Ideally, someone in the cold email business who seeks to leverage our IP and unique product.
What (if any) post sale support is included with the sale?
The owner will provide 6 months of part-time support to ensure a smooth transition.
Valuation
The valuation was determined by taking a middle-of-the-road ARR multiple (3.36X) to the sales numbers to generate the current price/valuation.
SEO Analysis (Ahrefs or SEMRush)
Authority Score: 4
Backlinks: 70
Referring Domains: 49
Total Keywords: 50
Social Media
The company has these social media pages.
LinkedIn - 1,495 followers
Twitter - 5 followers
Expansion Opportunities for New Owner
Several options to expand the business include
Lowering prices
Cutting costs
Cross-selling with a partner
Increasing features
Start spending money on advertising
Barriers to Entry
The company positions itself in a highly competitive industry. To sustain, one should gear towards building its own IP and goodwill. Technical expertise and connections would also be helpful in order to create a similar product-driven business in the same space.
Reason for Sale
The owner is selling the company to unlock value after having invested in a working product and system.
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All Assets Included with Sale
All current assets of the business will be included
Domains
Website and all content
Home Page
About Page
Services Page
Pricing Page
Case Studies Page
Resources Page
Blog Page
Contact Us Page
Hosting Accounts
AWS
Digital Ocean
Herokou
Monetization Accounts
Cold outbound email
Referral Partner Community
LinkedIn Ads
Social Media
Linkedin - 1451 Followers
Twitter - 5 Followers
Youtube - O Subscribers
Customer Contracts
Partner contracts
Referral partners
Misc Accounts
Apollo
Sendgrid
AWS
Herokou
ChatGPT
Bouncer
Instantly
ExactBuyer
Missive
Upwork
OpenAI
Google Analytics
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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. We offer 100% success-based services and have a financing arm for international individuals needing acquisition capital.
October, 2019 - (5 years old)
The following are included in the sale of this business:
The CEO is the major shareholder of the business and is also involved in sales generation. Additionally, he oversees operations and product development in terms of:
Adding listings
Paying partners/employees
Optimizing advertising
The owner will provide 6 months of part-time support to ensure a smooth transition.
The owner is selling the company to unlock value after having invested in a working product and system.
The business has evolved to a stage where it does not need to heavily depend on its owner to continue operating, hence any investor with an interest in this space could be an ideal buyer. Ideally, someone in the cold email business who seeks to leverage our IP and unique product.