Best SaaS Startups for Sale: From Leadgen to SEO tools (May 2024)

Welcome to the May 2024 SaaS deal review!

We have over 30 years of M&A experience buyer and selling businesses on this panel, so get ready for some juicy learnings. James Graves (General Counsel), Rainier Nanquil (Senior M&A Advisor), and Paul Kelley (VP of M&A) will break down each listing, what makes it special, and what questions to ask the founder. 

Watch the full webinar recording below or skip straight to the deals below.

Who Are Your Presenters?

James Graves, General Counsel at Acquire.com

I’m James Graves, and I’ve been the general counsel at Acquire.com for about two and a half years. I’ve been practicing law since 2015, working at F5 Networks, Amazon, and a few private law firms before arriving at Acquire.com. Throughout my career, I’ve worked in defense litigation, M&A transactions, startup law, and more. The biggest transaction I’ve handled was over $170 million.

Rainier Nanquil, Senior M&A Advisor at Acquire.com

I’m Rainier Nanquil, one of the in-house M&A Advisors here at Acquire.com. I have over a decade of experience in M&A, capital markets, and investment sales. I’ve been part of over a billion dollars of deal volume sourced, analyzed, brokered. I’ve seen all kinds of deals – good, bad, and everything in between. Previously, I was at Empire Flippers, Cushman and Wakefield, and Marcus and Millichap. My goal is to help my clients get the best price, best terms, and best transaction experience possible.

Paul Kelley, VP of M&A at Acquire.com

I’m Paul Kelley, VP of M&A at Acquire.com. I have 15 years of experience doing deals. I started out in Main Street managing a Main Street brokerage for about a decade, and then had my own firm in San Francisco called Synesis Advisors focused on the lower-middle market. I joined Acquire in early 2021 and have continued to refine the way we expeditiously help you guys get deals done.

What’s Acquire.com’s Impact?

Our goal is to build the best online marketplace to buy and sell SaaS startups… and we’ve earned that reputation rather quickly as we pass our fourth anniversary of being founded.

Since 2019, we’ve helped over a thousand startups exit, closed over half a billion dollars in closed transactions, and registered over 400,000 buyers. Live internationally? No problem – we’re active in over 100 countries and in every continent except Antarctica. 

What To Expect From Our Monthly Deal Reviews?

You’ll discover our top listings, why we love them, and tips on how you might go about assessing whether it’s the right acquisition target for you. We know our market better than anyone, and you can use our insights to make better choices about your next acquisition or, if you’re a seller, learn how buyers judge your business.

What makes these deals special?

Monthly SaaS Deal Review (May 2024)

Please note that the deals we discuss below may no longer be active on the marketplace. As some of our best SaaS listings, they’re in high demand and typically go under offer within a few days. 

Deal 1: Lead generation platform for businesses to generate and build email lists from social media channels

Highlights

  • Asking price: $2.52M (4.1x profit, 3.5x revenue)
  • TTM gross revenue: $723k
  • TTM net profit: $611k
  • Growth rate: 30 percent
  • Founded: 2022

View full listing

Watch the breakdown:


Deal 2: Data as a Service (DaaS) platform that caters to B2B customers

Highlights

  • Asking price: $9M (3.6x profit, 2.4x revenue)
  • TTM revenue: $3.8M
  • TTM profit: $2.5M
  • Growth rate: 5 percent
  • Founded: 2020

View full listing

Watch the breakdown:


Deal 3: SaaS-based digital marketing agency helping physicians and medical groups stand out online

Highlights

  • Asking price: $1.2M (6.3x profit, 2.2x revenue)
  • TTM gross revenue: $547k
  • TTM net profit: $191k
  • Growth rate: -2 percent
  • Founded: 2014

View full listing

Watch the breakdown:


Deal 4: Personalized outreach tool using real-time Google Ads data to deliver high impact outreach

Highlights

  • Asking price: $2.9M (8x profit, 3.2x revenue)
  • TTM gross revenue: $919k
  • TTM net profit: $362k
  • Growth rate: 23 percent
  • Founded: 2021

View full listing

Watch the breakdown:


Deal 5: Successful Moodle-based LMS integration tool for scalable e-learning experiences

Highlights

  • Asking price: $7M (12.2x profit, 2x revenue)
  • TTM revenue: $3.6M
  • TTM profit: $573k
  • Growth rate: 20 percent
  • Founded: 2002

View full listing

Watch the breakdown:


Q&A

Can we review their customer journey before we acquire?

Yes, if you have access to the startup’s private listing, you might be able to see that data already. You can also ask the seller to share the information. Sellers should be comfortable in sharing almost anything that helps you de-risk the acquisition and close the deal, but only if they’re interested in working with you.

Is a 30 percent growth rate for a 2-year-old company a major slow down since the first year launch?

It depends on the business and market. Until you know what the seller has been doing to acquire customers, or how competitive their product is, you won’t know whether it’s a promising growth rate or not. For example, if the seller has done virtually no marketing, a 30 percent growth rate is pretty awesome. 

Since ARR is less than TTM revenue, doesn’t that mean it is declining?

Not always. A gap between ARR and TTM revenue might also indicate a shift in the business model towards one-off purchases or other revenue streams. To understand the numbers, ask to see the full private listing, including a cohort analysis, and then discuss performance with the seller. 

Do listings state gross or net profit?

The listings state net profit.

Can a seller sell a SaaS built with no code platforms like bubble etc.?

Absolutely! Check out this article on the growth of no-code startups and how we help them get acquired.

What kind of funds do I have to verify to get access to pre-approved financing deals or SBA deals?

To verify your funds, we need to see bank or investment statements showing you have enough liquidity to acquire a company. Boopos usually requires you to put up 25 percent of the loan amount or 15% of the total purchase price in cash before they’ll consider financing your acquisition. Most SBA lenders expect you to put up 10 percent of the loan amount. For more information, visit the SBA website.

If someone writes “business challenges” as the reason for selling, is it a possible risk? 

Not necessarily. Business challenges could simply mean the founder can’t grow the business further using their existing skill set. This is very common in SaaS companies because many of their founders are technical. If they’re not interested in hiring a team or upskilling in sales and marketing, they may hit growth challenges they can’t overcome alone. In that sense, consider “business challenges” as opportunities. 

Do you have private equity on your platform?

Yes, we have a vast, diverse buyer network that includes private equity, venture capital, portfolio investors, individual acquirers, and lots more. 

As a buyer, what is a good deal structure to de-risk the acquisition?

The biggest risk to a buyer is the cash outlay. You’re putting down cash hoping the business will make you a profit in the future. But what happens if the business doesn’t perform as expected? Or if paying all-cash leaves little in the bank for growth campaigns and research and development? To understand how to manage acquisition risk, check out this article which describes the common tactics you might apply.

What’s the timeframe typically to close deals?

Deals usually close in 30-90 days, sometimes longer if the deal is especially large or complex.

Is financing SaaS M&A deals more difficult than traditional M&A deals?

In some ways, yes, since traditional banks are reluctant to finance online-only businesses where the diverse range of businesses and technologies don’t always fit their underwriting models. It might also be difficult to get an SBA loan unless you meet the SBA’s acceptance criteria. That said, you can usually raise SaaS acquisition financing from alternative lenders like Boopos or via an investment group.

I’m worried about acquiring a startup with technical debt (e.g. a bug to be fixed or feature still in beta) – how can I get around this?

You could make an offer that includes a condition stating the seller must complete the technical work by the closing date or within a certain period after closing. You might also tie this to a monetary holdback that gives you a pot to dip into to fix the bug or launch the feature if the seller doesn’t do it. To learn more about managing acquisition risk, check out this blog

What’s the easiest way to get startup recommendations emailed to me?

Enter your acquisition criteria and we’ll email you matching startups as soon as they go live. You have full control over the frequency of notifications and whether you get them by email, in-platform, or both. 

Would I pay more for a startup you’re advising or guiding? Do you look out for me as well as the seller?

Our goal is to help sellers negotiate an acquisition that’s right for them and you. By helping sellers navigate the acquisition process, you’ll find them much easier to work with, more prepared, and transparent about their goals. 

The seller says they’ve been reinvesting everything into growth and that’s why their profit is low – how can I verify that?

Ask to see financial documents that show where the profits were reinvested or recasted financials. Check the growth rate – is it higher than expected? Look for hard evidence that backs up the seller’s claims. If they’ve reinvested profits into growth, they’ll have records of campaigns and their impact on results.

Are startups that have only been operating for a year or so always high risk?

The longer the startup has been operating, the less likely it’ll fail suddenly, but it’s just one of many factors to consider when acquiring a business. A startup that’s only been operating for a year but with strong profit and revenue performance combined with a fast growth rate could still be an excellent opportunity.

What additional due diligence should I expect to do if a seller’s business resides overseas?

Escrow will take care of the seller’s AML and KYC verification, but you’ll also want to ensure the seller has verified their ID and business (in the US) or address (everywhere else) – both of which are stated on the listing. Consider also the tax implications of the acquisition and how you’ll handle currency fluctuations. Some buyers and sellers agree to transact in USD as it’s a reserve currency for most countries. While our LOI and APA builders were designed to be country-agnostic, you might want to consult with an attorney on any differences in local laws before signing any documents.

The content on this site is not intended to provide legal, financial or M&A advice. It is for information purposes only, and any links provided are for your convenience. Please seek the services of an M&A professional before entering into any M&A transaction. It is not Acquire’s intention to solicit or interfere with any established relationship you may have with any M&A professional.

Get content like this, and more, sent directly to your inbox twice a month.