Flippa, an online marketplace for buying and selling online businesses and digital assets, has announced its first venture capital funding round, an $ 11 million Series A, as it records over 600 000 monthly searches from investors looking to connect with business owners.
OneVentures led the round and was joined by existing investors Andrew Walsh (former CEO of Hitwise), Flippa co-founders Mark Harbottle and Matt Mickiewicz, 99designs, as well as the new founding investors of Catch.com at Gabby and Hezi Leibovich; the founders of RetailMeNot.com, Guy King and Bevan Clarke; and the founders of Reactive Media, Tim O’Neill and Tim Fouhy.
The company, with bases in Austin and Australia, was established in 2009 and facilitates the exits of millions of online business owners, some of whom operate in e-commerce, blogging, SaaS and app marketplaces, With the latest data integration being for Shopify, Blake Hutchison, CEO of Flippa, told TechCrunch.
He sees Flippa as “the investment bank for the 99%” of small businesses, providing an end-to-end platform that includes a proprietary valuation product for businesses – processing over 4,000 valuations each month – and a matching algorithm to connect with qualified people. buyers.
Business owners can sell their business directly through the platform and have the option of using a broker or business advisor. The company also offers due diligence and acquisition financing from Yardline Capital, owned by Thrasio, and a new service called Flippa Legal.
“Our strategy is verification at the source, which is the data,” Hutchison said. “Users can currently log into Stripe, QuickBooks Online, WooCommerce, Google Analytics, and Admob for Apps, which means they can showcase their online business performance with just one click, and shoppers can transparently review financial and operational performance. “
Online retailing, as a percentage of total retail sales, grew to 19.6% in 2020 from 15.8% in 2019, mainly due to the global pandemic as sales shifted online while physical stores were closing.
Meanwhile, Amazon has 6 million sellers, and Shopify sellers run over a million businesses. This has led to the emergence of e-commerce aggregators, backed by venture capital funds, which pick up successful businesses to expand, finding many in Flippa’s market, Hutchison said.
Flippa has over 3 million registered users and has added 300,000 new registered users in the last 12 months. The overall volume of transactions increases by 100% year on year. Although inception for over a decade, the growth and opportunities of the company prompted Hutchison to seek venture capital funds.
“There is a huge movement for this to be recognized as an asset class,” he said. “At the moment, the asset class is undervalued and is generating a massive swarm as investors take over and consolidate companies. We see the future of these aggregators becoming “Company X for Applications” or “X for Blogs”. “
As such, the new funding will be used to double the company’s headcount to more than 100 as it builds its offices around the world, as well as to establish outposts in Melbourne, San Francisco and Austin. The company will also invest in marketing and product development to evolve its business valuation tool which Hutchison compares to “Zillow Zestimate”, but for online businesses.
Nigel Dews, Operating Partner at OneVentures, has been following Flippa since its inception. His firm is one of Australia’s oldest venture capital firms and has 30 companies in its portfolio focused on healthcare and technology.
He believes the company will create significant change for small businesses. The team combined with Flippa’s ability to connect buyers and sellers places the company in a strong leadership position to take advantage of the market effect.
“Flippa is an incredible opportunity for us,” he added. “You don’t often get a top business in a whole new category with incredible tailwinds. We also liked that the company is based in Australia, but half of its revenue comes from the United States.