Business Start Date: 1/02/2018

Business Valuation: $1,325,000 USD

Percentage Being Sold: 100%

SaaS Revenue (2023): $842,000

Net Profit (2023): $415,555

Business Multiple: 3.7x Profit

Users (TTM): 4,010,000 total installs

# of Apps Included: 5

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Summary 

This app-based SaaS business has existed for more than 5 years with its main business model selling software-service iOS apps in App Store that make money via freemium subscription model. The business is almost 100% automated and doesn't require many people & time to operate but to handle advertising optimization and software maintenance. 

The Opportunity

The business was created in 2018 by a small group of co-founders and remote employees. After five years profits multiplied more than 100 times and the total number of apps and their difficulty seriously changed. Now it's a very successful business with more than 4 millions installs worldwide from Japan to the USA. Most users are US, but all countries from the world use services. Total lifetime revenue is more than $4,500,000  with a worldwide install base of over 4,000,000. 

There are several areas of growth:

1. Working with the product in terms of increasing the functionality of the application: improving existing functionality, introducing new functions or updating existing ones - from integrating deeper work and editing PDFs to increasing functionality in order to enter the Scanning sub-niche.There are plenty of ways to improve product in order to take a leading position in the current niche and strengthen positions in new ones

2. Working with the marketing funnel: optimizing conversions in the store and on the app page, optimizing subscription pages, optimizing pricing, ab-testing and iterative tests of all elements of the funnel.

3. Increasing traffic: optimizing existing traffic acquisition channels, increasing budgets for the most profitable targets, testing and optimizing new acquisition channels (there are quite a lot of them and we are almost not present there).

All these actions could lead to at least a twofold increase in revenue after implementation.

General Highlights

• The business is a portfolio of 5 main applications: 1. Wireless printing application with scanning and document editing features, that is superior to default Apple (and competitors) functionality. 2. Application for recording calls. 3. Application for sending faxes. 4. VPN with versions for iPhone and Mac. 5. Doc Scanner App & PDF Printer. All applications operate on a subscription model, have their own base of active subscriptions and have significant growth potential.

• 5+ years old subscription business with 4,000,000+ installs and users 

• Turn-key portfolio of applications are presented for sale as is. The programmers currently supporting the application will be able to give comprehensive answers to technical questions as well as post-sale support. 

• Marketing, promotion, and development are currently handled by the co-founders, so the buyer will need people to replace them. To start, a product manager or marketer manages the sales funnel. For the more technical stuff, a significant set of knowledge is not required; a middle-level specialist can handle the tasks quite well. 1-2 Swift developers will likely be needed to support and develop all of the applications. 

Niche

• Business & office tools; suitable for a couple of niches: printing apps, scanner apps, document managing and editing apps. One of the oldest apps in the niche. Advanced printing options that can’t be used without an app. Niche is pretty sustainable, with steady traffic and interest.

• Each application in the portfolio occupies its own niche. If desired, there is a good supply of expansion into the nearest sub niches

• A tap and print is one of the oldest applications in its niche. The remaining applications are average representatives of their niches

• Our tap and print app’s functionality is far superior to the native functionality of Apple and many competitors. Most features are not available without using our application. 

• The niche is growing. In 2022, total profits of the App store raised to 29%.

• What expansions within the niche are possible?

• As stated earlier: 1. Working with the product. 2. Conversion optimization. 3. Traffic growth

Customer Base

Main customer base:

• Active men and women mostly 35+ years old

The business gets customers from: 

• App Store - either through organic search or paid search

How much do customers cost to acquire?

• 5$+ depending on an App

Average revenue per user: 

• Differs from app to app, different price tiers and LTV; lots of user base is subscribed for more than a year

Revenue Sources

1. What are the main revenue models the business uses? Freemium SaaS, enterprise SaaS, eCommerce, affiliating, advertising, commissions, etc. Subscriptions are the main revenue models.

2. How does the company handle pricing? Are there levels? There are levels 1-99$, but looks like our pricing is optimal. Either way, there is still a lot of room concerning pricing strategy. Current strategy may be not perfect, so the buyer could test it and probably improve it.

3. What does each customer pay on average? Where are customers worth? Differs from app to app, but average subscription is $15/month 

4. Can you give a few examples of customers, who they are, and what they use the company for?

5. As mentioned before, 35+ m/f (we think it is about 60% of females), but it differs from app to app. There were no customer surveys of interviews.

Financials

How has revenue and net income been trending for the last 1-3 years? The last few months?

- Revenue is pretty stable. Does not change seriously. But it could be much better if a professional marketing team is involved, as mentioned before - marketing and user acquisition are being conducted by co-founders.

Are there any anomalies in the financial history of the business? If so, are they explained?

- Some fluctuations in revenue were caused by the searching and testing for an optimal financial and marketing model, but this did not significantly affect the

overall stability of the business.

Can all of the revenue streams be transferred to a new owner? Does the owner have an influence on the earnings power (i.e. owner-specific earning relationships)?

- Yes, the new owner can seriously increase the revenue with new investments and a new marketing team.

Sales (USD)

2018 - $195,000

2019 - $370,970

2020 - $730,200

2021 - $1,116,000

2022 - $988,000

2023 - $842,000

Profit/SDE (USD)

2018 - $114,600

2019 - $281,500

2020 - $592,708

2021 - $713,000

2022 - $740,000

2023 - $415,555

Operations

Most of the time is spent optimizing advertising campaigns in ASA and iterating through ASA. Approximately 5 hours per week. When increasing budgets, introducing new functionality, or improving A/B testing, more time will be required. Remote programmers are used as needed to fix errors and implement new functionality. Contacts of remote employees will be transferred to the buyer in any case.

What does the internal operations look like - what is the breakdown in people vs process vs technology that makes the business run?

• For now - applications support is provided by 1 remote programmer and 1 cofounder who conduct marketing. 

Is there any office or physical assets existing that the business owns or rents? Is it needed for the new owner?

• No, remote team is how the business is run.

Any other relevant details to give perspective about what is needed to keep the business running?

• Good product owner and marketing efforts will definitely get applications to new heights 

Team

There is currently 4-5 employees running the business (both part time and full time):

1 product owner and 1 marketer (application co-founders), 1 remote designer (15$ per hour approx), 1-2 remote programmers (40$ per hour approx), remote copywriters as needed. That's it.

Sales/Marketing

What are the main marketing channels for the business? Email, social media, calling, advertising, influencers, affiliates, professional sales, etc.

• The main paid marketing channel is Apple Search Ads. 

What is the cost to acquire customers vs their lifetime value?

• Differs from app to app.

How much is spent on advertising right now and historically? Where is this money spent? 

• More than $1,400,000 has been spent on marketing but the business is currently not fully dependent on them and advertisements represent 43.5% of revenue, 95% in Apple SearchAds.

Partners

No 3rd party partners currently - the business’s main marketing director quit business in the middle of 2022. Since then they have had two Russian marketing companies, one went bankrupt and the other provided bad marketing results. So for now - everything is being done by co-founders.

Main Expenses

1. The main category of expenses is advertising in ASA. The second category of expenses is improvements, implementation of new functionality and related expenses. All costs vary depending on business requirements.

2. Will the new owner be able to keep the cost structure the same? Can they make any savings? Pretty much yes. Either way - if the buyer will improve overall CR, improve product itself and increase marketing budget - there will be significant revenue growth

Valuation

The company is being valued at 3.7x of its current profit. This marks a very affordable multiple within the SaaS niche which usually values based on revenue. 

SEO/ASO Analysis

App 1: 3,000,000+ downloads

App 2: 254,000 downloads

App 3: 627,000+ downloads

App 4: 31,200+ downloads

Barriers to Entry

The main barrier to entry is the amount of money and time to achieve a current subscription base. The niche has not much competition and the reason these apps have succeeded so well is their fine-tuned marketing funnel and seamless app experience.

Miscellaneous Details

No IP whatsoever. There was an attempt to register a "Printer App" trademark, but unfortunately it was impossible. No patents, no trademarks, no lawsuits. App was made from scratch, no reskinned or bought code was used. No code was ever sold to anyone. Original source code will be transferred to the buyer.

For the 5th app:

• Revenue in the last 30 days - $424
• Revenue in the last 90 days - $1,500
• Revenue in the last 365 days - $6,320
• Expenses for the last 30 days - $0
• Expenses for the last 90 days - $685
• Expenses for the last 365 days - $9,085

Current subscriber base is 60 and all subscriptions are monthly.

At present, updates are extremely rare, work with the product and its promotion is actually not carried out. At the same time, skillful hands can greatly increase the revenue and performance of the app. Many leaders of the scanning niche get up to $2-3M monthly, strong middlemen - about $50k, so the application also has a significant growth potential If you give it enough time (massive ad campaigns; funnel and conversions).

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All Assets Included with Sale 

As the apps are being sold, they are the main asset being transferred with the sale including links to all 5 apps.

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About the Agent 

FIH.com is a Manhattan-based M&A advisory firm specializing in the sale of remotely-run successful digital companies (around the world) from $1M-100M in revenue, including apps, marketplaces, freemium + enterprise SaaS, ecommerce, affiliate/advertising groups, and more! We are proud to work with the very best entrepreneurs and investors, so if that’s you and you are in the market to acquire or sell a relevant business, then we encourage you to reach out for a complimentary consultation.