My second SaaS acquisition just reached $50k in lifetime revenue.
Some interesting details about this deal:
I bought the SaaS in June 2023 for $97k (half paid in cash, the rest through seller financing).
I’ll recoup my investment in under 3 years, which is a solid return.
Monthly operating costs are less than $80, and I spend under an hour a week managing it (mainly responding to emails).
Year-to-date revenue is $29k, and projected revenue for 2024 is $42k.
I found this SaaS through Acquire.com, which is also where I made my first acquisition.
The business is B2B with a churn rate of around 2%. About 95% of revenue comes from annual subscriptions, with an ARPU of $10.33 and an LTV of $339.80.
It’s achieving 40% year-over-year revenue growth.
Acquiring SaaS businesses has been transformative for me, and I plan to build a portfolio of SaaS companies over the coming years. Not only is it a lot of fun, but it’s also a great way to build wealth.
If you have any questions about this deal, feel free to ask in the comments!
What is your history of schooling and employment? Is it connected to the SaaS you purchased?
What kinds of emails are you receiving, as well?
I spent a few years working for a SaaS startup after studying marketing. In addition, I’ve provided consulting services to more than 30 SaaS companies. I’ve basically left the SaaS I got alone, with the exception of a few minor price adjustments. It’s a fairly simple, mature product.
Usually, the emails have questions concerning pricing or assistance.
I appreciate your inquiries.
I apologize if this seems like a silly inquiry, but what kind of consulting did you do? Just wondering what kind of business/company serves that many other SaaS businesses.
Firstly, congratulations on the purchase. You seem to be off to a terrific start!
If a large percentage of your installs do not result in paying clients:
Is there another method to make money off of them? On the free version, provide them with advertisements or other offers.
Also, I advise launching a drip email campaign in which you send a series of emails to non-paying customers highlighting the advantages, case studies, unique selling proposition, etc. of the premium version.
Sending out the series is essentially free once it is written. You have just raised your conversions by 25% if, at this moment, 2% of your installs convert and the drip series converts an additional.5%!
How specifically did this work with seller financing? Did you have to pledge any assets? Is there a high interest rate? I’ve seen advertisements for it but never actually looked into it.
Thanks for sharing and congratulations!
=If I understand this well, the SaaS is “done,” meaning you’re not attempting to expand into new markets or add new features, etc. If yes, did you intentionally choose to limit your time to the hour each week you indicated, or was it just a matter of preference?
Have you ever discussed potential low-hanging fruit to increase the value of the SaaS with a technical person?
Which websites or channels directed you to this SaaS?
Are there five places in particular that you seek for SaaS items to buy?
Edit: I meant to thank you for sharing the post!