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Weekly deal analysis based on public information where I share my insights on a listing to help you begin to evaluate a business for sale.
Deal: The most influential no-code agency and education platform. Helping entrepreneurs launch app ideas.
Type: Agency startup
Asking Price: $2.1M (4.9x profit, 1.8x revenue)
Customers: 100-1,000
8 year history
35% growth rate (~4% per year)
Team in place & founder is willing to stay on during transition
My 2 Cents:
This business is a no-code agency and education platform. I really like community-based internet businesses. Having an audience is extremely valuable. I would want to learn more about their own online education platform as this is something that would need to be maintained and may offer limited functionality/scalability. They also mention an AI-powered app scoping tool that could potentially cut down on the work that their account managers and app builders do. Ask how close this is to being complete, and if it is live, how effective has it been so far.
I like that they have prepared a thorough playbook of potential growth opportunities, but each will take a good amount of time, effort and investment.
I don’t like that the seller is the face of the company. In the listing it is mentioned that she is used in the ads and possibly other parts of their funnel. Determine how much time is being spent by the seller and how much of an issue this might be.
Asking Price: Based on the last report by Acquire, the average agency multiple is 1.2x revenue and 3.5x profit. (February 2023) I would push back on the asking price and review the financials to determine an appropriate valuation.
Some other questions I would ask:
What are the main acquisition channels?
How does the revenue break down by service?
What are some example apps that were created?
What types of apps are users building? (internal vs. external)
How do you compare to AI app generators? (imagica, softr, Claude)
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