Australian startup Flippa, an online marketplace for buying and selling digital businesses, has secured $ 15 million in Series A funding, as COVID-19 pandemic leads to increased business small-scale acquisition.
The round was led by OneVentures and also included investments from existing backer Andrew Walsh, former managing director of Hitwise, which was acquired by Experian.
Among the new investors were the founders of Catch.com.au, Gabby and Hezi Leibovich; the founders of RetailMeNot.com, Guy King and Bevan Clarke; and the founders of Reactive Media, Tim O’Neill and Tim Fouhy.
Flippa was founded in 2009 by Mark Harbottle and Matt Mickiewicz, who also co-founded 99designs.
The platform uses an algorithm to accurately rate businesses and match them with qualified and suitable buyers. It also offers due diligence and acquisition financing tools, as well as a Legal-as-a-Service product.
The idea is that small online business owners, such as Amazon sellers, Shopify store owners, bloggers, app developers, and even Software-as-a-Service entrepreneurs, can sell their business quickly. and easily, without having to engage with a broker or M&A advisor.
Flippa has been in business for 12 years, with the founders bringing General Manager Blake Hutchison on board in 2018.
The company now has around 3 million registered users, 300,000 of whom have joined in the past 12 months.
The total transaction value is up 100% year over year, and between 3,500 and 4,000 appraisals are typically processed each month, with a total value of $ 340 million on average.
“We’re not talking about unicorns, we’re not just making fast-growing startups that are backed by venture capital,” Hutchison said. SmartCompany.
“We’re talking about real small business owners who’ve built something of value. “
“Just the beginning”
The COVID-19 crisis has seen an increase in M&A activity, as well as more people taking the plunge to start their own business or small business.
Many of these companies are based on the digital economy, supported by platforms such as Amazon or Spotify. These are the types of businesses Flippa is designed to serve, and Hutchison has seen its business evolve accordingly.
On the buyer side, around 1,000 potential new buyers register on the platform every day, he says.
“Savvy Investors” recognize that buying something with good traction and a financial history means they can see what worked and what didn’t, and therefore start in the limelight themselves. .
“There are a lot of intentions in the market,” he explains.
On the sales side, Flippa doesn’t necessarily see more businesses listed, Hutchison says, but the average value of a sale is increasing.
Sales on the platform can range from $ 1,000 up to $ 25 million, he explains, with more downside on the small side.
In the past 12 to 18 months, however, the number of transactions over $ 100,000 has more than tripled.
“The pandemic has obviously boosted online business ownership, but buyers tend to be interested in mature assets,” says Hutchison.
“We think the inflection point on the sales side will come in a few years, when all of these companies… realize this opportunity,” he adds.
“It’s just the beginning.”