PE收购SaaS的6类买家：Tuck-in、平台与价值型策略拆解

All right. Um, so I'm going to talk about uh, one of the most misunderstood acquirers of B2B SaaS. But first of all, like, why do I know anything about this? Like Rob said, I run Discretion Capital. Um, we've done dozens of B2B SaaS M&A deals in this range. And obviously, uh, co-founder of Tiny Seed where we see a lot of this, uh, at least inbound M&A from private equity. Um, at a high level, there are sort of three buckets of uh, acquirers of B2B SaaS.

First off, there are strategics, which are basically large private or public companies that um, are mostly buying you for because of, well, for strategic reason. Either they want your tech or your IP or your team or your reputation or a combination thereof. Um, and I think in the range, and just to be clear, I'm talking here, it starts probably with revenue range around 500,000 to a million up to about 50 million of ARR when this applies.

Um, probably twice somewhere between 20 and 30% of acquisitions are about are from strategics. Uh, I'm not going to talk about them mostly because I think people understand like the rationale behind behind why uh, strategics acquire. Um, the second bucket is private equity, which is what I will be talking about. That's [clears throat] the reason why you want to understand it is because it's the vast majority of acquisitions are somehow related to private equity.

If somewhere between 60 and 70% of acquisitions are private equity related. And then there's the other, which honestly is kind of a grab bag of other highly variable quality acquirers. It's anything from individuals, family offices, you know, any kind of thing like that. Um, so the thing is the tricky thing about private equity is that they all kind of sound the same. Like you go to their website and they're all sort of blah blah capital or so and so partners.

And they all say really like you great things like build trust. You know, advance your journey. Embrace possibility and realize potentials. Like, well, what the hell does that mean? Um, and so it's very difficult for like someone to go to the website and just look at it and I'm just like, what is this private private company do? What is the strategy? And the thing to understand is that these are definitely not the same.

They are fundamentally different strategies with extremely high variance in terms of willingness and ability to pay. Now, private equity can be divided into three big buckets. Tuck-in [clears throat] buyers with high willingness to pay, platform buyers with medium willingness to pay, and value buyers with low / extremely low willingness to pay. Tuck-in buyers Tuck-in buyers are basically larger, usually larger or medium-sized private equity companies that have a large company in their portfolio to where whom your company is a strategic fit.

So, really the way to think about them is sort of deal strategic or semi-strategic. And really they can be the best of both worlds. Um they can basically pay sometimes extremely well. We've had basically private equity tuck-in buyers that outcompete strategics purely on price. Um they're very fast to execute because well, they're deal makers. This is what they do all day long. Um they don't have the kind of personality-driven M&A that often happens in strategics.

And they also have a very high certainty to close. They value their reputation for for getting a deal done at the terms they say, which is not always the case with strategics. Probably about 60% of the deals we do are are tuck-ins and honestly, we love doing tuck-ins. Platform buyers Platform buyers starts to come into play when you're slightly larger. Uh you probably need to be somewhere between 5 and 10 million of ARR for most private equity to consider uh you as a platform.

And what being a platform means is like they look at your company, they'll say, "Okay, that's a great company. We'll build around that company." So, they may even do things like buy other companies to tuck into your company and build a whole strategy uh around that company. And usually like I said, requires 5 to 10 million. There are some private equity companies that goes low as two, but it's kind of rare. It does require growth.

I've never heard of a private equity company that comes along and buys a 10 million ARR flat or no growth company. Um and the thing to understand too is that the reason I say medium willingness to to pay is that they can't really overpay for the platform. You can't They can't pay 30 x ARR for a platform because chances are they can't sell that for that high a multiple later even if they grow you. Then there are value buyers.

And value buyers are basically well, they're funds that look for value, right? And in terms of strategies that are applicable to B2B SaaS and there are some that are like like roll-ups and stuff that don't really apply so much for B2B SaaS. There's sort of three basic strategies. One is the turnarounds or what's called special situations. The other is what I call cigar butts. This is the last two are my names. Cigar butts and then the third's is steals.

[snorts]

Turnarounds, basically the goal here is to take a company that's that's sort of broken, that's that's maybe not growing and return it to some state, usually growing, where it's like basically they can sell it for more. And it's It can be extremely profitable, right? Like you can buy

[clears throat]

like a 10 million ARR business that's not been growing for several years, probably for 2 x ARR. If you can return that to 30 40% growth, you can maybe sell it somewhere between 4 and 10 x depending on profit and other things. Operationally, it's extremely intensive. And they can be quite picky buyers. So they often know what they're good at fixing. So they won't buy like a flaming turd that had all sorts of things wrong with it.

Um and the [clears throat] key to understand about um about turnarounds is that they won't be running the company like you have. So you can't be a seller to a turnaround or a special situations and be like, "Gee, I wish you hope you run your company my company like I have been done." Because that's not what they do. Their goal basically is to change how it's being run. Second one, cigar butts. This This is more like the sort of Warren Buffett fans of the world.

Um they're not necessarily looking to return to growth. They will do that, but really what they care about is like cutting as brutally as possible so they can milk the cash flows. That's a basically the strategy. They're very often long-term holders. This is often the strategy of the more evergreen hold co type private equity funds out there, and they are ruthless expense cutters, always. Um it's not unusual for one of these to basically fire absolutely everybody in country and then over outsource to consultants over abroad just to run it.

And again, they won't run your company like you have, which like often what happens is we talk to a founder, we tell them like you got to cut cut cut cut in order to make this the most valuable, and they're just not willing to do it because well, they have a relationship with their employees and things. Um but this is what these what these guys do. Then there's the third one, which is steals. And [snorts] it's exactly what it sounds like.

Basically, it's much faster and easier to buy a company for much less than it's worth than it is to fix a bad company, right? It's much better. Um then you don't have to fix anything. You just have to sell it for what it's worth later. Um now, the question is why would anyone ever sell a company for less than it's worth? And really the answer is B2B SaaS companies are an extremely opaque market. There's no such thing as Zillow for B2B SaaS where you can be like, I wonder what my company's worth.

Um also founders, which is particularly for bootstraps, have a very a sort of a DIY mentality. It's like, why should I pay fees to this banker, right? Um I have a great relationship with this buyer.