The rapid maturation of software has made it easier than ever to build “very” small businesses. Small businesses range from construction to manufacturing to trade, and are rightfully called by many the “lifeblood” of the American economy. In fact there were over 31 million small businesses in the US in 2020 according to the US Small Business Administration. We anticipate SMB SaaS will continue to grow considerably fueled by the trend of digitization over the next decade.
We’ve observed firsthand the rise of a whole new category of small businesses - SMBs that started and run their businesses entirely online. These include eCommerce companies running their business on Shopify, creators on platforms like Slack, and a wide range of other SaaS companies.
Among this massive category of software startups, only a very small percentage goes on to raise venture financing, and an even smaller portion grows beyond $5 million in revenue. The ultimate outcome for most of these small software companies is a trade sale, but the process to get there is incredibly complex. It requires organizing extensive financial information, processing complex contracts, creating presentations, determining valuation, identifying and qualifying buyers and then executing a complex legal transaction. Entrepreneurs typically need to lean on a number of professionals throughout a lengthy process such as M&A advisors, bankers and lawyers.
We are excited to announce our investment in MicroAcquire, an online platform that streamlines the M&A process for both buyers and sellers of small businesses. Through MicroAcquire, business owners can instantly value their businesses, match with professional advisors to facilitate transactions, and quickly identify a host of qualified and motivated buyers.
MicroAcquire has grown quickly since launching last summer and now boasts over $318 million in combined revenue across all listings, with more than 60,000 registered buyers. As an emerging Internet marketplace, MicroAcquire plans to improve all the workflows in an M&A transaction and to facilitate connections between every relevant party in the process. With millions of small businesses becoming digital in the US, millions of professionals in the broader ecosystem, and an ever-increasing number of software-based startups created each day, we are excited for the role MicroAcquire can play in software M&A.
We are delighted to partner with CEO Andrew Gazdecki and his team as they empower every stakeholder in the small business acquisition ecosystem to execute more efficient M&A transactions.