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- Climb's M&A Weekly: Another deal by Bending Spoons and more M&A in AI
Climb's M&A Weekly: Another deal by Bending Spoons and more M&A in AI
Bending Spoons continues their momentum by adding a file transfer service and tech enabled media partner MiQ makes their 4th recent acquisition
Nick @ Climb
August 04, 2024
Welcome to Climb Advisor’s weekly deal newsletter highlighting transactions announced last week across the B2B tech landscape.
Climb Advisors is an M&A and credit advisory firm focused on B2B software and services companies in the range of $5m to $100m+ enterprise value. We guide CEOs and business owners through the process of selling their business & assist investors in sourcing & closing great deals. We love to talk markets and share beneficial information - please reach out any time.
Bending Spoons stays active with acquisition of WeTransfer
Overview: Regular readers of our newsletter will be familiar with Bending Spoons given their acquisitions of Mosaic Group, $155M financing round, and an interview with their Co-Founder and CEO Luca Ferrrari all featured in recent months. This latest announcement sees them add WeTransfer, a file transfer service with over 600K subscribers and 80M monthly active users, to their ever growing portfolio of apps which includes high profile names such Evernote and Meetup. Read more here.
Climb Comment: Bending Spoons has a model of acquiring apps & digital businesses & making operational changes (often around pricing). In the case of recently acquired Evernote, the free plan was reduced to 50 notes per month & 129 staff members were laid off. These sort of changes are often challenging for both users & talent, but can enable a product to survive & even grow over the longer term. A model worth studying for anyone looking at force-factor pricing changes and the impact on a business. WeTransfer currently has a $19/month unlimited plan - likely that the Bending Spoons sees potential to generate returns via a renewed structure there.
Strategic adtech deal sees Bridgepoint Advisors backed MiQ buy Pathlabs
Overview: MiQ is a tech enabled media partner for marketers and agencies, focusing on data science, analytics and training programs to ensure media investments are spent in the right areas at the right time. Similarly, Montana based Pathlabs provides digital media execution services to independent agencies, helping them manage planning, execution, optimization and reporting for paid media campaigns. This announcement marks MiQ’s 4th recent acquisition, following on from deals for AirGrid, Grasp and the US arm of Samba TV. Read more here.
Climb Comment: Strong acquisition here with MiQ adding a team of 100 & deep capabilities around media execution + more than 50 agency partnerships. As digital marketing grows ever more competitive, with ad costs rising and the structural challenges of tightening data regulations, it is crucial for agencies to both execute on truly differentiated campaigns and to have the data infrastructure to report and attribute those campaigns. MiQ has built a robust platform enabling this and the acquisition of Pathlabs brings further tactical strength.
Genstar Capital backed ACA Group acquires Encore Compliance
Overview: ACA Group have established themselves as a leading name when it comes to providing governance, risk and compliance (GRC) solutions to companies in the financial services industry. This deal for Encore sees them add a set of AI compliance software, particularly around call management. With generative AI set to be a major focus for regulators amidst its continued emergence, this announcement is another prime example of companies using M&A to address important gaps in their offerings. Read more here.
Climb Comment: Compliance tech remains in the spotlight as investors seek safe returns in stable growth industries. ACA Group serves financial services firms with advisory & managed services as well as cybersecurity solutions and compliance tracking - here they add Encore as a point solution geared towards regulatory compliance on research calls. The SEC has been strict of late on firms use of alternative data and expert networks, trying to define the lines between privileged and non-privileged knowledge & regulators in Europe are doing the same. Encore provides rails around these calls & will be a valuable tool in ACA Group’s kit.
Deepnote adds Hyperquery to reinforce their AI powered data workspace
Overview: Deepnote are buying a company their CEO, Jakub Jurovych, described as their “closest competitor,” in data science and analytics company Hyperquery. The acquirer, who’s high profile backers include Index Ventures, Accel and Y Combintor, helps teams collaborate by building a workspace which allows them to share their work and receive feedback in real-time. Deepnote’s platform also comes equipped with AI assistants that help speed up analysis and allows newer team members and non-technical teams to run more advanced data analytics. Read more here.
Climb Comment: One of the main themes right now for any company in the Generative AI space is that of the race for market share and talent. Here two competitors join forces to compete together. Deepnote is a provider of AI enabled data notebooks - plugging data from 100+ sources into an intuitive interface and enabling GPT-4 to interact with and analyze the data and for technical users to write new code right on top & alongside. Truly the future of data forward engineering and no doubt a huge boon for both teams to be working together.
ThetaRay acquires Screena to help their fight against financial crime
Overview: ThetaRay has acquired Screena, a provider of software which helps financial institutions screen individuals, companies and other entities against lists of sanctioned parties. The acquirer’s financial crime detection technology is already used by over 100 financial institutions such as banks, fintechs and regulators, across 40 different countries such. This deal further bolsters their transaction monitoring, screening and customer risk assessment product suite, as ThetaRay continues to invest in technology to help prevent financial crimes such as money laundering, terrorist financing and drug trafficking. Read more here.
Climb Comment: Thematically similar to the ACA Group deal above, ThetaRay, a leading provider of anti-money laundering technology for banks in Europe and worldwide, acquires Screena, an AI-powered name & entity matching tool which can flag transactions in real time between suspicious or sanctioned parties. Tools like this create operational efficiency & reputation control for banks and also build tremendous value in protecting against the back-end risk of enabling restricted transactions.
Article of the week
We turn to Tidemark and their 2024 Vertical & SMB SaaS Benchmark Report for this week’s article. In this highly informative and interesting read, Tidemark surveys close to 250 Vertical SaaS operators to gather data with the aim of helping executives of these type of businesses make data-driven decisions.
For anyone running one of these businesses, considering acquiring one, or with a general interest in the market this is a must read!
Thanks for following along & hope you found something useful or interesting.
All the best,
Nick