Case Study: Basis Vectors Acquires CommerceV3
This company, CommerceV3, provides eCommerce software for medium-sized merchants to effectively sell their products online. The CommerceV3 offers a turnkey approach by offering both the software and marketing services to their stable base of over 200 subscribers. This is a mature software company, founded in 2002.
The market for eCommerce software is over $7 billion and is expected to grow at over 16% per year through 2027. This firm has successfully positioned itself in a defensible portion of this quickly growing market. The company targets online retailers who have at least $3m in annual online sales.
It has been run as a lifestyle business with minimal investment in sales and marketing. Virtually all new customers come inbound via referral.
Highlights of this business include:
- Subscription-based software company with recurring revenue
- Very low customer churn
- Favorable CAC to LTV ratio
- Strong culture with loyal and dedicated employees
Industry: SaaS – eCommerce Shopping Cart and Services
Deal Participants: 2 owners who bootstrapped the business in 2002. The owners decided they had taken the business as far in its growth trajectory as they were able. A buyer needed to be found so the founders could begin to transition out of the business. The buyer, Basis Vectors, runs a private equity fund located in New York City. In addition to deep financial resources, he brings extensive knowledge of the software business and a team of experienced software developers and digital marketing experts.
Transaction Type: Acquisition of 80% of the outstanding shares, with the remainder retained by the sellers and allocated to an employee pool.
Transaction Value: Between $1m – $5m.
Transaction Motivation: The sellers wanted to pursue other interests. The buyer wanted to be in the ecommerce market.
Transaction Outcome: Both sellers agreed to continue with the new owner, all employees were retained.
