The marketplace is so hot with deals right now the team is super busy keeping up with demand. After quite the slump this time last year, we’re happy to say the market has bounced back in a BIG way!
In this guide we’ve got the Q1 wrap up and the biggest takeaway was the $253 million in closed so far this year.
In our 2020 Year in Review report we tracked 81 businesses reported as sold, which equated to $465.6 million in list price value. Most of which was done in Q4 of last year. At year's end we noted 71 pending deals and many did end up closing in Q1 of 2021.
In fact, between January and March 43 deals closed with a whopping value of $252,916,083!!! That’s over HALF of the entire year for 2020 in just 3 months. Boy-oh-boy are these new aggregators hungry for deals!
Q1 2021 Business Price Guide Report
A quick reminder of how this guide is created… we search for ALL listings available online and compile the data. We are limited to publicly available data and rely on brokers and websites to update when listings are sold, the current price, and other details.
- New listings for Q1’21 vs Q1’20 have increased significantly (129 vs 52 respectively).
- Sold lists equate to over half of last year's total deal value in just 3 months.
- The median multiple has regained its strength returning to post COVID levels of 3.9x (see graph below).
- January 2021 was a huge month for closings which correlates to a busy Q4 in 2020.
The above chart tracks the overall medium multiple on all listings. As shown, each year that passes sees a stronger valuation for business in the ecommerce space. New buyers are flooding the market pushing prices higher as they fight to win deals. Crunchbase reports that $2.3b has been raised by these firms to acquire and roll up ecommerce businesses.
February saw the usual bump in new listings like we see each year, followed by a high spike in pending deals in March. The 27 sold listings to February are a reflection of the hectic market in Q4 2020 and the beginning of 2021.
So far this year we have tracked 43 business sales which is a significant jump compared to past years. 2021 is by far the large volume of sold deals (combined $253MM) for any Q1 we have tracked. For context Q1 in 2020 did a meager $13.5MM in sales in total across the 3 deals.
Multiples appear to have recovered since dipping last year during the height of COVID-19. Spurred on by an influx of cashed-up aggregators, now more than ever it’s a seller’s market.
Currently, there are 153 Active listings of which 112 are listed over $1M as at the beginning of April 2021.
The small percentage of unique or proprietary business continues to be the lowest as these are the most desirable deals investors are seeking and therefore they get snapped up quickly from the marketplace.
The market is bigger but in relative terms, the percentage of sold listings is similar to previous years or slightly smaller.
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