Climb Advisors Weekly M&A Deals Newsletter

Climb Comment: Looks like a land-grab play here as OneSend has its HQ in Australia and a strong presence among SMB and lower middle-market businesses, especially in the brick and mortar space, throughout APAC.

Some analytics capabilities acquired as well via OneSend’s Portal Companion. As we’ve highlighted in previous newsletters, martech in particular tends to benefit from both a full-suite platform approach, as well as a combination of efficient marketing channels and the budget to scale these. There’s an abundance of platforms which offer marketing automation in all its various flavors - niche capabilities, broad feature sets and strong LTV/CAC ratios create standout businesses.

It’s also worth noting that OneSend has been an ActiveCampaign partner since 2020. Partnerships can be an excellent backdoor to eventual M&A and tends to smooth the diligence process as both parties have a higher level of familiarity compared to a cold approach.

Climb Comment: This is a great example of the value creation opportunity in niche software when executed well. There are approx. 300k auto repair shops in the US. Many of these are still locally owned and operating without a digital backend, representing a true ‘blue ocean’ opportunity and generally efficient acquisition channels (phone/email/direct marketing).

We don’t know terms but have to assume that:

- given recency of capital raised [$3m seed in 2021]

- the size of the team (nine employees per LinkedIn)

that there was runway left, quite possibly operating profit in the business and that the deal took place at a ‘compelling’ valuation. InTune had a technical CEO without an automotive background. Great example of someone picking a niche, building a valuable product in it, and exiting to an established larger group who will drive the next level of value creation. It’s a truly beautiful thing.

Climb Comment: Exciting to see generative AI M&A deals hitting the news! From what we could research, it appears that ChatCSV was built by a single developer and achieved some traction prior to this acquisition. Generative AI has changed the game and created real opportunities for engineers to identify a challenge, build a front-end UX, some interaction with ChatGPT or other large language models, and create a functional product in days or weeks.

There is a great use case here, i.e., being able to engage conversationally with large CSV files. One would have to suspect that this is where the overall UX for digital interaction is headed. Flatfile has made ChatCSV free to use as part of the acquisition and we plan to give it a try. They are an API-driven data import platform, making enterprise data collection and migration easier using AI/ML to correctly map fields. It’s also worth noting that Flatfile raised $50m in October of last year from Tiger Global and other leading investors, as well as angels who include founders from Airtable, LinkedIn and other major players.

Climb Comment: eDiscovery is a hot space lately, with Reveal making a double acquisition in August and KLDiscovery acquiring Cenza in September. eDiscovery, the process of searching digital documentation (FOIA requests, email records, etc) for potential evidence in court cases, is a tool many legal firms are leveraging software for to make attorney and paralegal workflows more efficient. The Consello Group offers a wide range of business advisory and investment banking services, and it’s exciting to see them get a PE deal over the line.

Climb Comment: Great example here of the increasing intersection between digital and physical, with Homebase and Quest both providing residents with smart living capabilities. Quext offers a suite of IoT products alongside property-wide WiFi options, CX and marketing tools for property managers. As real estate tightens operators will look to improve margins and the opportunity to add incremental revenue streams via additional service offerings will be a space to watch.