• IP-heavy SaaS product providing content management platform backed by proprietary technology and artificial intelligence.

• International Fortune 500 client base include Warner Bros, National Geographic, Bank of Canada, DOW Jones, and more!

• Full team in place to run operations so that technology never becomes obsolete.

• 2.15M EUR revenue in 2022 and almost 700k profit!

Niche

The businesses’ areas of expertise include natural language processing, graph data, taxonomy management, extraction of information from various media, automatic categorization and classification, search, inferencing and many others. In layman terms, they help their clients bridge the gap between the human language and what computers understand.

The business is categorized as a semantic technology company. The ultimate goal of semantic technology is to help machines understand data. 

Customer Base

In a classic B2B sense, this business has about 27 customers and has found a customer base with US-based top film companies and other digital media companies. Here is a breakdown of 2022 customers by niche:

Media & entertainment: 541,111.80€

Health: 287,415.03€

Finance: 264,244.57€

Professional publications: 213,553.07€

Public: 172,980.70€

Miscellaneous: 103,518.53€

R&D: 71,835.20€

Grand Total: 1,654,658.90€

Revenue Sources

The business makes money by selling SaaS software licenses to large companies. A $210,000 contract delivered over 18 months to a major US film company is one example of a sale. 

Revenue is broken down into these categories but SaaS is the main one and the others are all derivative: SaaS (direct platform access), Maintenance (setup fees, bug fixing, etc.), License rentals (for companies that don’t want to pay for implementation). Professional services (additional consulting to make SaaS work better), R&D revenue (R&D tax credit).

The business has 3 main products:

1. Intelligent Taxonomy Manager - the business offers a comprehensive solution for taxonomy and ontology management as well as artificial intelligence based content tagging.

2. Content Auto-tagging Manager - Enable automation of mundane and time-consuming indexing processes while allowing manual, qualitative review of machine-processed content.

3. Knowledge Browser - is a web-based portal featuring powerful search capabilities combined with graphical visualizations. It provides intuitive, read-only access to broad audiences who need to visualize, search, navigate and browse collections of enterprise data.

Financials

The business operates a stable and very profitable business with more than 1M ARR on track for 2023. 2022 had over $1,342,440 in recurring revenue while 2021 was at $993,740. 2024 already has $792,840 revenue scheduled. Here is a breakdown of revenue and profit:

Sales (EUR)

2020 - 1,497,441 €

2021 - 1,457,443 €

2022 - 2,146,985 €

Profit (EUR) - SDE

2020 - 428,223 €

2021 - 63,155 €

2022 - 677,959 € (Projected)

Operations

The business is run by the proprietary software behind it which is developed by its R&D employees, sold by its sales team, and then integrated by the customer support team. 

Product Example

Here is an example of a user of the B2B SaaS product from the company. The company owns the software and hosts it on the client’s domain (via DNS redirect). The client pays a subscription fee to be able to use the company’s software.

https://terminologie.finances.gouv.fr/index

One large US organization’s publishing system sends their content to this company’s system - the software then annotates, tags, classifies, et.  ... and then sends the annotated content back to their system. This saves a ton of man hours for the companies using it.

If you'd like to see a PDF example of a client facing proposal, we can let you see a document prepared for a potential Fortune 500 customer. 

Team

The team is made up of around 15 people. 12 employees on french contracts (including 2 owners), usually 2 to 3 interns, 1 Washington DC based part time contractor.

Marketing

Customers contact the business mostly through the website - at least 1 out of 2 says they learned about the company via word of mouth. No money gets spent on advertising or buying customers. A miniscule amount has been spent on Google Adwords.

This presents a huge opportunity to scale in future through strategic ad-spend.

Partners

AWS delivers all infrastructure the business needs to deliver their SaaS product - these are the cloud expenses in the financials. Two polish software houses do coding for ITM Graph (a new product of the company) and new versions of CAM - their expense is listed under subcontracting in the financials. Infeurope is involved in helping with distribution sometimes - pure selling consultancy and not SaaS.

Main Expenses

Main expenses are payroll, subcontracting, and cloud/serve. But the P&L has traditional expenses included like social security, accounting, legal, and office fees.

Competition

The following are among potential competitors to give market perspective.

PoolParty: https://www.poolparty.biz/ Austria

SmartLogic: https://www.smartlogic.com US - Acquired by Marklogic in 2021

Top Quadrant: https://www.topquadrant.com/ US

Expert Systems: https://www.expert.ai/ Italian - They are often on acquisitions track

Proxem acquired by Dassault Systems France - https://www.3ds.com/products-services/netvibes/products/proxem/proxem-studio/

Valuation

The business’s price was determined at about 3.5-4X of the company’s projected ARR figure which is fair given the market right now. Given the history of the business, the top level client list, profit margins, and the impressive amount of IP in the business, this is a very intriguing deal for any smart SaaS fund. 

SEO Analysis (Ahrefs or SEMRush)

Authority Score: 38

Backlinks: 14,400

Referring Domains: 739

Organic Keywords: 80

Expansion Opportunities for New Owner

The business has a lot of ways to improve it:

1. Launching free version.

2. Spending money on advertising.

3. Redesign website to be better lead funnel.

4. Adding on additional services.

5. Automating system to onboard clients easier.