WeWork announced its acquisition of cloud-based security management portal Waltz earlier this week. Waltz will capture data around employees who enter and exit a space for WeWork’s enterprise clients, such as Microsoft. Enterprise employees will gain access to different WeWork locations seamlessly by way of the software on their cell phones, and businesses can create ‘door groups’ restricting the use of some spaces to certain people. This deal comes after three office management and analytics acquisitions by WeWork earlier this year, when the co-working market-leader purchased Euclid, Managed by Q, and Teem as part of its evolution into becoming a SaaS provider.
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In entrepreneurial news this week, Founder Thomas Smale released a complete guide on How to Value and Sell an E-Commerce Business, to help founders and investors alike gain a more comprehensive understanding of what goes into the valuation of e-commerce stores. In the guide, Thomas covers the specific valuation drivers, multiple ranges and operating factors that impact the value of an e-commerce business on all different platforms, so head over to the FE International blog for the full article!
The world of digital marketing saw YouTube implement multiple updates in response to public scrutiny over privacy, security, and safety issues on the platform. Viewers will now be able to alter the “Recommended Up Next” videos produced by the algorithm to stop queued videos from certain channels. Additionally, the platform will now showcase small blurbs describing why a certain video is being placed in users’ “Up Next”, a milestone of transparency into the algorithm that users have not historically had. These changes have launched globally on the iOS app, and will soon be available on Android and desktop.
In platform news this week, Spotify redesigned its app with the aim of increasing the visibility of podcasts among its listeners. The music streaming company has recently acquired two podcast production companies for around $400 million to expand its library for Spotify users. Spotify hopes to capture 25% of the growing podcast market, which is projected to reach $1 billion by 2021. If Spotify can achieve this share of the market it will see a $250 million revenue growth (by their own estimates).
This week FE is pleased to highlight an extremely well-established B2B Coding and Recruitment Software business. The SaaS company presents a rare acquisition opportunity for a new owner looking to take over a market-leading B2B SaaS business with a clear value proposition, unparalleled track record of success, and a long list of noteworthy clients in the coding and recruitment niche. Having onboarded a stellar client roster consisting of multiple Fortune 500 and Nasdaq Emerging Cloud Index clients, the highly-rated product and clear value proposition have allowed revenues to reach a c.94.2% compound annual growth rate for the 2016 to 2018 period while maintaining high margins and generating strong cash flows to invest in growth. Please follow the link above to request more information.
In events news, Founder Thomas Smale had a great time at the Baby Bathwater Institute Retreat networking and taking in the perspectives from fellow business owners in the 7-9 figure range this week! The FE team also enjoyed co-hosting the IndieHackers NYC Meetup, where we held a highly productive roundtable discussion with SaaS founders at all stages! Always great to meet other founders and enthusiasts to swap information and network, so make sure you keep an eye out for our next meetup here. Next week Thomas will be heading to Vietnam for Digital SEO Summit, where he will be giving a talk on how content business owners can improve the value of their business. Feel free to reach out if you will be in attendance and want to connect!
Continue reading below for more on WeWork’s new acquisition, Spotify’s redesign and YouTube algorithm updates.
- Industry-leading software with a stellar client roster of multiple Fortune 500 brands
- Successful history of bootstrapped growth with revenues reaching a c.94.2% CAGR over 2016 to 2018
- Highly attractive SaaS metrics with a high LTV of c.$3,950 and low net MRR churn of c.1.3%
- Reputable brand in a rapidly-growing niche
- Scalable business model with lean cost structure and high margins
Annualized revenue: $5,534,000
Asking price: $35,000,000
- Impressive monthly growth in recurring revenues demonstrated by a c.7.2% CMGR over the LTM
- Simple business operations requiring low owner involvement
- Established a firm foothold in a lucrative and evergreen niche
- Innovative product offering that has reached a strong c.$512 customer LTV
- Downward trending and low customer churn of c.6.6%
Yearly net profit: $32,000
Asking price: $77,000
- Well-developed product with extensive functionality helping users purchase hundreds of thousands of items worth tens of millions of dollars on eBay
- Steady revenue growth with revenues rising at a c. 128.2% CAGR over the 2014 to 2018 period
- Firm foothold in eBay’s dominant and expanding ecosystem
- Highly automated and streamlined operations allowing for minimal owner involvement and high margins
Yearly net profit: $348,000
Asking price: $1,271,000
- Firm foothold in a large expanding market of 4.3 billion internet users
- Strong SERP ranking secured by c.19,000 keywords
- Impressive traffic profile recording c.290,000 visitors over L12M
- Meteoric revenue growth of c.30% CMGR over L6M
Yearly net profit: $12,600
Asking price: $34,000
In the News…
WeWork Acquires Waltz
On Tuesday WeWork announced its upcoming acquisition of Waltz, an app that allows users to enter properties with one overarching credential that will solve WeWork’s enterprise clients’, such as Microsoft, trouble managing their employee’s memberships to the WeWork properties.
The goal of the acquisition is to make it easier for WeWork members and large corporations in WeWork to connect with and enter multiple spaces more seamlessly through the implementation of SaaS. This new entry system will increase connectivity in all global WeWork spaces by increasing communication and data flow replacement. Waltz is not simply a replacement for keys or electronic cards but is a cloud-based management portal designed to provide companies with extensive data about who comes and goes within their buildings.
WeWork, as of the past year, has been on an acquisition spree as part of a transition from just a co-working space to a SaaS provider. The company has bought management platforms Teem and Managed by Q as well as spatial analytic platform Euclid.
YouTube Announces “Up Next” Algorithm Updates
This week YouTube announced a series of updates and changes that are aimed at giving users increased control over videos on personalized homepages and in the algorithm-based “Up Next” future.
YouTube says it will allow users to have more visibility into why they’re being recommended a certain video, a newfound peak into YouTube’s algorithm. A new feature allows users to access controls and specifically tell the algorithm to stop suggesting videos from particular channels. This feature will be housed in the already existing three dot menu next to a video. Another big feature released is a blurb under suggested videos detailing exactly why that video is recommended based on user watch history.
These announcements come following backlash from the public and the government on privacy, security and safety.
Spotify Expands Further into the Podcast Market
In February, Spotify launched their campaign to spend $400-500 million to heavily incorporate podcasts into the music streaming platform with the acquisition of podcast creation studios such as Gimlet Media and Anchor.
Now, Spotify has redesigned its app to make those podcasts far more available to listeners and has rolled out a new feature this week that allows advertisers to specifically target ads based on what podcasts listeners are consuming. The music website also announced a new algorithm that now incorporates podcasts into users’ personalized playlists as a way to tap into the growing podcast advertising market. This growing market saw a revenue increase of 54% last year to $479 million and is projected to grow to $1 billion by 2021.
Reports note that if Spotify can hold 25% of this market (which is what estimates are saying) it would generate $250 million more in revenue for the company.