Salesforce continues to dominate global SaaS headlines this week with the release of its new Essentials product, a new sales and customer service software aimed specifically at the lucrative small business market. Having previously seen limited success in the SMB space, Salesforce intends the new software to target smaller teams requiring less functionality and more affordable pricing. With products that can be used “out-of-the-box”, Essentials eliminates functions that small businesses have complained are too complex and too expensive for their needs. According to Forrester Research analyst Kate Legget, Salesforce may run into trouble getting SMBs to choose Essentials over competitors. Along with the release, Salesforce announced they will discontinue Salesforce IQ and Desk.com, two products aimed at small businesses, in March 2020.
In the advertising world this week, Google announced that they will ban advertising by cryptocurrency platforms beginning in June 2018. Google’s Director of Sustainable Ads, Scott Spencer, shared that the decision came in response to Google having “seen enough consumer harm or potential for consumer harm that it’s an area that we want to approach with extreme caution.” This follows a similar update by Facebook earlier in the year.
Google also confirmed that they recently ran a “broad core algorithm update“ which has affected the appearance and rankings of certain websites in search results. Since Google releases updates of this nature “several times per year” websites that notice a dip in performance should not deem their pages as having been downgraded. Rather, the algorithm update intends to support pages which have been historically under-rewarded. Google advised publishers to not grow concerned with changes in page performance and to continue to focus on creating quality content.
App business owners and buyers, this one’s for you! Founder Thomas Smale recently published a comprehensive guide to App Valuation: How to Build, Value and Sell an App based on experience advising businesses we have sold in the App space. In the guide, Thomas dives into what makes an App business valuable enough to sell, operational considerations when running your App business and development guidelines for each type of App on the market, be it SaaS, mobile or marketplace. Whether you’re looking for ideas on how to conceptualize an App, or wondering what it might be worth if you were to sell it, our ultimate guide can point you in the right direction at every stage in the process.
New in SaaS business listings this week we have a $4.4M B2B digital marketing and SEO business, with a unique value proposition that has driven a MRR CAGR of 81% for the 2015 to 2017 period. The business’ leadership position in the profitable and growing SEO services niche is a result of its widely-accepted product, with 1,600 paying users and impressive SaaS metrics of c.3.5% net MRR churn rate and $1,600 CLTV over the last year.
Featured listings this week includes a $928K motivation and education advertising business, boasting consistently high website traffic with 46 million visitors and 53 million pageviews over the last 12 months driven by c.1,000 unique posts that help the website rank for c.10,000 keywords. The business also has a very large Facebook following with over 2.5 million highly-active followers. Also featured this week is a $2.7M App in the US telecommunication niche, with rapid revenue growth reaching a c.40% CAGR for the 2014 to 2017 period, landing consistently in the top 100 US grossing Apps with tens of thousands of 5-star reviews, high repeat client rates of c.25% over the past year and low owner involvement. If you are interested in any of these businesses, follow the respective link to request a prospectus.
Event activity in 2018 continues to ramp up, with Thomas attending DCxSaigon last week before heading to host a series of investor meetings out of our new office in Singapore. Next up for Thomas will be Recurring Revenue in Marina Del Rey, CA on April 12, so shoot us an email if you will be in the area and would like to schedule a meeting.
Continue reading below for more on Salesforce’s new software for small businesses, Google’s banning of cryptocurrency ads and their broad core algorithm update.
Deal Highlights
New:
SaaS – B2B Digital Marketing & SEO – $2M ARR
- Unique value proposition and clear market demand driving an MRR CAGR 81% for the period 2015 to 2017
- Leadership position in the profitable growing SEO services niche (forecast to reach $79 billion in 2020)
- Widely accepted product with 1,600 paying users and impressive SaaS metrics with c.3.5% net MRR churn rate and $1,600 CLV over the trailing 12 months
- Unparalleled ease of use and functionality confirmed by independent third-party sources
Yearly net profit: $1,110,000
Asking price: $4,400,000
Featured:
App – Top 100 US Grossing Telecommunication – $102K gross/mo
- Rapid revenue growth reaching a c.40% CAGR for the period 2014 to 2017
- Consistently in top 100 US grossing Apps with tens of thousands 5-star reviews
- Leadership position in a large and lucrative niche, with an authoritative brand and years of operational history
- High repeat client rates of c.25% over the past year
- Low owner involvement
Yearly net profit: $677,000
Asking price: $2,709,000
Advertising – Motivation & Education – $47K gross/mo
- Large Facebook following with over 2.5 million highly-active followers
- Continuously high website traffic with 46 million visitors and 53 million page views in the last 12 months
- Strong backlink profile with links from multiple notable sources
- Over 1,000 unique posts helping the website rank for c.10,000 keywords
Yearly net profit: $511,000
Asking price: $928,000
Sold:
E-Commerce – Quilting & Sewing – $58K gross/mo
SaaS – B2B Social Media Marketing – $6K MRR
Affiliate – Home Furnishings – $4K gross/mo
Affiliate – Professional Hunting – $850 gross/mo
In the News…
Salesforce Releases Software for Small Businesses
Salesforce has this week announced that they are releasing Essentials, a new sales and customer service software for small businesses.
Addressing previous struggles to capture much of the small business market, Salesforce’s new sales and customer service software will be targeted at smaller teams. Essentials is a series of apps that are simplified versions of Salesforce’s Sales and Service Cloud products, according to Executive Vice President Mike Rosenbaum. Small businesses have historically found Salesforce software too complex and expensive, with companies like Door, a Dallas-based real estate brokerage marketplace, reverting to using Excel to log customer data due to the complexity of the platform. Essentials touts its products as ready to use as soon as they are purchased, is priced at $25 per user, per month and is intended for teams of 10 or fewer. While Essentials is $50 less than professional versions of Salesforce software products, it appears that it is still more expensive than other products available to small teams, according to Kate Leggett, Forrester Research analyst who suggests that Salesforce won’t be top choice for all small businesses out there due to heavy competition.
With the release of Essentials, Salesforce announced the discontinuation of small-business products Salesforce IQ and Desk.com, starting March 2020.
Google Bans Cryptocurrency Ads
Google has announced this week that they are banning all cryptocurrency-related ads, including those from companies with legitimate cryptocurrency offerings.
According to Google’s director of sustainable ads, Scott Spencer, they are updating their financial services-related ad policy to ban advertisements for initial coin offerings, wallets, and trading advice. According to the company’s advertising policies page, the update will be effective beginning in June 2018. Last year, Google had to remove more than 3.2 billion ads for violating their policies, up nearly 100% from the 1.7 billion it removed in 2016. Alphabet earns c.84% of total revenue from advertising, which means that creating an environment where ads are safe, effective and transparent to the viewer is of utmost importance to their reputation. Of the decision, Spencer stated, “We don’t have a crystal ball to know where the future is going to go with cryptocurrencies, but we’ve seen enough consumer harm or potential for consumer harm that it’s an area that we want to approach with extreme caution.”
Google’s ban follows similar actions by Facebook, which banned cryptocurrency-related advertisements earlier this year.
Google Releases Algorithm Update
Google confirmed this week that they recently released a “broad core” update to their search algorithm.
While Google releases specific updates to their algorithm daily in order to fix miscellaneous small issues, they recently ran what they call a “broad core algorithm update” last week that has impacted pages’ SERP placements. Updates of this nature are released several times a year, according to tweets posted by Google, and unfortunately there are no steps sites can take to work around any impact these changes may have had on their performance. However, Google urged publishers not to panic, saying that the update’s effect on performance is a result of previously under-served pages now gaining recognition. In their statement, they added, “There’s no “fix” for pages that may perform less well other than to remain focused on building great content. Over time, it may be that your content may rise relative to other pages.”
Many website owners speculated at a Google algorithm update over the weekend, and their statement on Twitter confirms it.