Business Start Date: February 2016

Business Price: 1.55M USD or 1.45M EUR

Sales (TTM): €556,436

Net Profit (SDE): €186,833

Business Multiple: 7.8x TTM SDE and 2.6x ARR

Users: 1.5M registered users, 28,000 paying users, and 188,000+ Monthly Active Users

App Downloads: 9M+

Lifetime Revenue: 2.6M EUR

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The Opportunity 

This is a excellent opportunity to acquire a very profitable 7.5 year old SaaS app business in the competitive lifestyle/exercise analytics niche. This business is being offered as a simple acquisition for the owner to exit - the business is competitively positioned with over 9M historical downloads in the Google and Apple app stores with a still very active diversified base of 188,000 monthly active users, 9M historical downloads, and 28,000 paid subscribers from Europe, Asia, and the Americas. The business has been run as a lifestyle business but with more focus on growth, hiring, and expanding features & user base, the business can be grown immensely. 

General Highlights

• 7.5 Year Old App with 9M Historical Downloads and 2.6M EUR in lifetime income

• 28,000 active paying subscriptions and 188k MAU from around the world!

• Very light owner requirements with not much needed to run business (as it is very automated)

• Focuses on high growth segment of fitness activity tracking around the world (especially in growing developing countries) - 46%+ of users are Chinese!

• Priced at about 2.5X of TTM revenue

Niche

The business operates a single app in the fitness space (available on major app stores) that acts as a typical freemium SaaS model where users can use the basic app for free but if they become a paying customer, they get access to premium features. 

The business focuses on fitness tracking for consumers around the world. Most users are able to use the app for free on their Apple or Android phone but almost 15% of active users are paying for monthly subscriptions for premium features.

This app can be closely compared to Strava, which is one of the market leaders.

Customer Base

The business has 1.5M registered users and 9M historical app downloads on major app stores.

These customers come from all over the world - the top countries include Thailand, Vietnam, Poland, Brazil, Hungry, China, USA, and more!

Every month 188,000 people record 264k+ activities, including over 1.3M KM of running recorded.

46.2% of users come from China but many other countries have a lot of paying users as well. 

Traffic

The business has 188k MAU and 14k DAU and 9M historical downloads to their app.

The average engagement time per user is 13 minutes and 31 seconds.

Over its lifetime, the company got the following country breakdown in visits by country:

1. China - 1M users

2. Thailand - 607k

3. Vietnam - 437k

4. Brazil - 331k

5. Italy - 219k

6. Hungry - 197k

7. Germany - 176k

The user base in Asia, South America, and Europe shows a diversification in users not experienced by many other app companies. 

Revenue Sources

The average user generates $0.42 in revenue to the company and the main free-mium revenue model is the following:

1. Free Users - there are over 150,000 users each month that use the app but are not paying customers.

2. Paying Subscriptions - there are 28,000 active subscriptions that generate 56k EUR MRR (or 672k projected ARR)

   1. Paying allows for user get access to the following premium features:

      1. Weight Loss Management Software

      2. Ad-free access to app

      3. Enhanced goal-tracking

      4. Access to all stats about your progress

3. Advertisements - free users view ads

   1. In-App Ads generate around 1-2K each month.

Financials

There is over 2.6M EUR in lifetime revenue. Here is the breakdown of revenue and profit (as detailed from tax documents). Note that true profit is much more as owner has debt, rent, salary, and a tesla all funneled as business expenses and there are only about 6.4k in fixed monthly expenses on top of ad spend (which fluctuates from 10-95k)

Sales (EUR)

2019 - 215.532

2020 - 253.388

2021 - 962.209

2022 - 815.832

2023 (through June) - 275k

Profit (EUR) **

2019 - (86,883)

2020 - (8,735)

2021 - 233,131

2022 - 20,305

2023 (through June) - (15k)

** True profit is around 67,922 EUR higher than what is listed for each year.

Operations

The business is based in Vienna, Austria as that is where the founder is but the business is run remotely and can be based anywhere, given the customer base, model, and more. 

The business has an office they pay 500 EUR a month for but it is expected that this will not be continued by the new owner (as it is not needed since the only other employee works from home).

Team

The business is just made up of the owner/CEO and their lead developer and then they use some freelancers as needed (for marketing, accounting, etc.). The developer gets paid 4k EUR a month while the owner pays themselves 4.2k EUR a month. 

Marketing

The first million of downloads were organic downloads and later they started with advertising with Facebook, Google, and Apple ads and then hired 2 agencies to help manage it (they are no longer working with them. No affiliates or influencers have been used yet.

Given the B2C nature of the software service, the business uses a lot of traditional advertising methods combined with its brand image, natural feedback from its customer base, and then curated content generated by the company. In this, historically the main sources of marketing are:

1. Facebook Ads

2. Apple Search Ads

3. Google Ads

4. 2 Agencies who specialize in advertising

This said, over the last year, the only marketing funds have been spent directly with Apple and Google search ads. Over the last 2 year, the average spent on Apple ads was $44-45k a month while Google ads were only at 

Given the product is a app, advertising in the app store is the main way to get conversions on ones ad-spend and Apple consumers tend to spend more on apps than Android users, which is why the revenue amounts are what they are. 

Partners

The business relies heavily on Apple and Google to host, distribute, and publish its app. Besides that, the business had 2 marketing agencies but they no longer use them although they are at their disposal. 

Both Android and iOS are native Apps developed in Kotlin and Swift.

Main Expenses

The main expenses are the following:

1. Google and Apple Commissions

   1. Revenue is shown net but both app marketplaces take a fee and some tax for each transaction.

2. Lead Developer Salary

3. Advertising Costs

   1. On Facebook, Apple, and Google and some agency costs (historically)

4. Misc Software Expenses 

   1. Server costs $600 a month

   2. Licenses cost $300 a month

5. Owner Compensation - owner has the following monthly expenses funneled through business (which are not relevant to potential acquirer)

   1. Rent - 500 EUR

   2. Tesla + insurance - about 1000 EUR

   3. Salary - 4200 EUR

   4. Loans - 250k in loans which make up 2 bi-yearly payments of 27k EUR

Work and Skills Required

The CEO/owner spends 30-40 hours a week on the business, doing maintenance, customer support, product management (including feature development, creating & optimizing ad campaigns), accounting tasks, and speaking with developers.

Developer spends 40 hours a week developing Android and iOS App - they are planning to stay on with new buyer.

Who is the ideal buyer for this business?

Given the simple framework of the business, ideal buyer could be a aggregation fund looking to diversify its holdings and expand into new niches, a accredited investor or entrepreneur who has a little time to run a new business and desire the cashflow from growing it, or even a large strategic buyer in the SaaS fitness analytics space who is looking to acquire a smaller competitor. Many potential end users in the fitness space have shown interest in the company.

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

The current owner/CEO is willing to stay on for 6 months to train the new owner and they are available to stay on longer if the buyer gives them additional compensation.

Valuation

The business is priced at about 2.5X of its current revenue at 2.25M - the sale should be structured as an asset sale to avoid any potential bank and venture debt the current owner has. 

App Analysis 

Apple Ratings: 4.6/5 with 1,000+ ratings

Apple Downloads (53.8%): 4.56M downloads

Google Ratings: 4.3/5 with 32,800+ ratings

Google Downloads (46.2%): 3.92M downloads

Social Media 

Email List - 1.2M emails 

https://www.facebook.com/ - 41,000 followers

https://www.instagram.com/ - 10,800 followers

https://www.youtube.com/ - 224 subscribers

Expansion Opportunities for New Owner

There is a lot room to grow, but the business only has a small team and needed to make profit and could not risk spending too much on new channels (previously). The new buyer can grow the business many ways, including::

1. Advertise on all ad channels in all available countries: TikTok, Snapchat, Twitter, Programatic Ads.

2. Use influencers and affiliates to broaden the scale of marketing and attract new users without much added cost. 

3. Use ASO and SEO to expand natural attraction of users and downloads.

4. Expand use of customer data - the business has 1.5M users and 1.2M emails. These users have stored 10M GPS activities on our server (including running, biking routes, and personal information like pictures etc.). This data can be used for city planning and much more. 

Barriers to Entry

In today’s world, acquiring a user base and developing a brand is the hard part that takes a lot of time and money while developing the software is the easy part. For this business, it would be very hard for another company to conquer the app even though there are plenty of competitors, because the business has a trusted brand, a great UI, and an attractive freemium model with smart features. 

Reason for Sale

The owner has been running the business for almost 8 years and it is time for them to move on now to new things.

Miscellaneous

46.2% of the company’s historic revenue has come from China which represents a great opportunity for expansion. 

The business has a tesla, office, loans and more in its name so buyer should plan the sale as a asset sale to make simple unless they need the company name and are willing to go through hassle to clear the liabilities of the company. 

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All Assets Included with Sale 

All assets used to run, maintain, and grow the business are included with the sale - including but not limited to:

1. Domains

2. Website and all content 

3. All User Data 

4. Proprietary Software

5. All customer bases 

6. Hosting Accounts 

7. Ad accounts

8. Monetization Accounts (App Accounts)

9. Social Media Accounts 

10. Work contracts

11. Future Sales and Customer Contracts 

12. Partner contracts

13. Knowledge of how to run the business

14. Misc Accounts

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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.