Those start-ups that want to sell VSEs-SMEs like we would at Leboncoin

Posted on Nov 2, 2022, 8am

Homes, cars, work, clothes… you can find everything at Leboncoin. Except business. However, this market is not negligible, as it is estimated that there are between 50,000 and 60,000 company transfers per year in France. According to the latest study by In Extenso and Epsilon Research, the most active segment continues to be SMEs and smaller SMEs (valuation of less than 5 million euros).

To buy or sell VSEs or SMEs, you need to go to specialized websites such as Cession PME or Fusacq, the ad aggregator Bpifrance or the business transmission/acquisition networks of the Chambers of Commerce and Industry (CCI).

“When you have a small business, it is very difficult to sell it. You can’t go to an investment bank because it’s not economically viable,” says Arthur Porré, co-founder of technology-focused investment bank Avolta Partners.

relative automation

Recently, it was possible to visit Alvo, a start-up launched before the summer and which has just completed a fundraising of one million euros exclusively from business angels, including the founders of Qonto (Alexandre Prot and Steve Anavi) and Olivier Brourhant ( Mantu). Its valuation amounts to 4 million euros “post-money”. “The market for mergers and acquisitions in the ‘small cap’ is completely broken and opaque,” said Matthieu Stefani, co-founder of the young studio at his agency CosaVostra.

This new market, which he created with Germain Michou-Tonning (former director of partnerships at Qonto) and Thomas Colin (financial management consultant), lists VSEs-SMEs valued at less than €5 million. Alvo, on the other hand, does not assume mandates of less than 500,000 euros because its model would not be profitable.

Some documents are generated automatically (information memorandum, confidentiality agreement, etc.) and “due diligence”, that is, all the checks that a potential buyer will do before a transaction, is faster. But not all processes prior to a merger-acquisition have been automated. “We don’t sell cars,” admits the manager.

Even if company ads worth less than 500,000 euros are not operated by Alvo, they are still visible to allow buyers and interested parties (lawyers, accountants, notaries etc.) percentage when it has a mandate.

Sell ​​for less than 50,000 euros

“This market system requires increasing supply and demand at the same time. It’s expensive and difficult, but once you get past a certain point, it’s a win-win situation”, emphasizes Arthur Porré. To attract both parties, Alvo primarily targets accountants and intends to rely on the respective networks of founders. To date, it has listed around twenty ads, claims 1,000 subscribers on its platform, and signed ten terms.

DotMarket, in turn, specializes in buying and selling small websites (merchants, blogs, etc.) valued between 50,000 and 3 million euros. “Below, the audit costs us a lot,” specifies Kevin Jourdan, head of the start-up. Same principle as Target: small ads and big automations. All for a commission between 10 and 14%.

Launched in early 2020, the start-up reached 3 million in turnover in 2021, and expects 4 to 5 million in 2022 and 10 million in 2023. DotMarket was inspired by an American start-up, Empire Flippers, whose turnover was approximately 170 million dollars in 2021.

Buy a business on TikTok?

Kevin Jourdan, however, wants to offer the same opportunities to everyone and will therefore launch a market next December for sites between 500 and 50,000 euros. “We are going to provide training so that buyers can audit their own sites”, specifies the manager.

In turn, Matthieu Stefani thinks that the classified format will not be the only one in the coming years. “We are going to sell businesses on TikTok and Instagram,” he says. After the financial influencers, the M&A influencers?

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