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- 2024. 12.22 - Online Biz Acquisition Opps
2024. 12.22 - Online Biz Acquisition Opps
Saas Or Elearning???
Corey Philip
December 22, 2024
Hey hey peeps: today we have 3 deals.
🔫 Gun to my head question:
If I had to write a check for one of the businesses in this email, with no other details which one would it be?
I think the lead gen platform is over priced for what it is as revenues are declining while I’ve observed that market become highly commodititized.
The ecommerce shipping Saas is in a market that is difficult for me to understand. The valuation is fair here and software seems valuable but I think (ideally) the buyer should have ecommerce experience. So not for me… but maybe for you!
That means I’d go with the mental health elearning. There’s high margins, 644k of profit and only one employe. It’s a high scale, low cap-x business protected by the moat of accreditation. This one won’t last on the market!
1/ (overview) 18-Year-Old Lead Generation Platform - $657K SDE - 4.87X
Generating $657K in SDE, this SaaS business offers visitor-identification technology through a subscription model, serving 500+ clients, including Cisco and Dell/Boomi. It operates with a lean team of six and features integrations with Salesforce and HubSpot.
With nearly two decades of operations, the business runs efficiently and includes assets like proprietary software, customer data, hosting accounts, and social media profiles. The 4.87X multiple reflects its established cash flow and scalable operations.
My Take:
This business has an enviable client roster, featuring names like Cisco and Dell/Boomi, which speaks to the credibility and quality of its platform. However, the numbers tell a different story—profits have plummeted over 50% in just three years, raising red flags about sustainability and market position.
At a 4.87X multiple, the valuation feels steep given the rapid profit decline and the lack of clear growth drivers. While the subscription model and enterprise clients offer stability, the business faces headwinds from a stagnant product line and a competitive market increasingly driven by AI-driven solutions.
Unless an acquirer has a clear strategy to reverse the financial trajectory—through aggressive product development or significant cost restructuring—the current price point may not justify the risks. This business may be better suited for someone looking for a turnaround project rather than a cash-flowing asset.
2/ eLearning Business | Mental Health Services - $644K SDE - 3.88X
This 8-year-old eLearning business provides accredited virtual workshops and EMDR training for psychologists, social workers, and psychotherapists. Operating entirely remotely, it serves professionals across the U.S., Canada, Europe, and Australia. The company’s accreditation in both the U.S. and Canada sets it apart, establishing trust and creating high barriers to entry for competitors.
The business generates $644K in SDE with a lean team of one employee. Its current offerings include online courses, recorded webinars, and workshops designed to meet the ongoing education needs of mental health professionals. With no development team required due to its licensing agreements, it generates a significant portion of traffic through word-of-mouth and organic referrals. The business also maintains a substantial email list of 50,000+ subscribers, which it leverages for outreach and client retention. The current owners are willing to maintain a minority stake, ensuring a smooth transition and continued operational support post-sale.
My Take:
This business’s accreditation is a major competitive advantage, creating a high barrier to entry for new players and cementing its reputation as a trusted provider in the mental health eLearning space. The business also benefits from excellent margins, as you’d expect from a digital product with minimal operational overhead.
That said, with only one employee (the seller) it’s likely they haven’t pursued corporate clients (corporate training is a HUGE market). Adding a sales or business development team could unlock significant opportunities, particularly by expanding corporate client relationships or tapping into its 50,000+ email list for upsells and targeted campaigns. The foundation is strong, but the real potential lies in scaling beyond the current steady-state operations.
3/ SaaS Business | E-Commerce Shipping Optimization - $134K SDE - 3X
This high-margin SaaS platform optimizes e-commerce shipping costs for businesses, focusing on ShipStation users. The platform automates cartonization and rate shopping, enabling e-commerce businesses to save significantly on shipping costs. It boasts an impressive 99.5% gross margin, with 17 active and sticky customers generating predictable recurring revenue. The business has minimal overhead expenses (~$57/month), making it highly efficient and profitable.
The company is positioned for growth, with opportunities to expand through partnerships with additional carriers, integrations with platforms like Shopify, and targeting ShipStation's extensive 100K+ user base. The business is priced at $399K, reflecting a 3X multiple on profits.
My Take:
Its standout strengths are its impressive gross margins and low operational costs, providing a reliable profit margin. With only 17 customers, the revenue base is somewhat concentrated, which poses moderate risk but also indicates significant upside if scaled strategically. Serious understanding of how these 17 customers were a acquired and what pain point the business solves for them is needed to figure out how this business could be grown. There’s a huge market here but unless you have that understanding of an ecommerce business and how cartonization fits into their processes this could be a tough business to run.
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