The rise of micro-acquisitions in India: How Flippa is driving the trend

As India’s start-up ecosystem matures, a new trend is emerging: micro-acquisitions. This approach – focussed on buying smaller businesses – has become increasingly popular among Indian entrepreneurs looking for cost-effective growth avenues. Platforms like Flippa are at the forefront of this shift, facilitating these transactions by offering a user-friendly, data-rich environment where buyers and sellers can connect seamlessly.

In a country that has seen rapid growth in entrepreneurship, micro-acquisitions represent a shift from the traditional emphasis on large scale deals. And this trend is being fuelled by an influx of domestic funds and micro venture capital (VC) firms dedicated to nurturing early-stage startups.

Changing Mindsets: Why Micro-Acquisitions?

Entrepreneurs are turning to micro-acquisitions for the flexibility, speed and cost-efficiency that they offer. By targeting smaller, less capital intensive deals, they are able to side step the complexities of a traditional M&A, making it a viable pathway for expansion and growth. Besides these can also help entrepreneurs diversify their holdings and adapt to market demands without overcommitting resources.

Flippa allows Indian entrepreneurs to access a global marketplace where they can identify businesses aligned with their objectives.

The M&A Landscape in India

While the US mergers and acquisitions market has seen slower growth, private capital inflows in India are on the rise, according to PwC.

The second quarter of 2024 proved to be a landmark period for Indian startups, with a 57% year-on-year surge in megadeals driving fundraising to an eight-quarter high of $5.2 billion, as reported by Deal Street Asia.

Flippa has capitalised on this trend. A marketplace founded in 2009 for buying and selling online businesses, it has amassed over 3 million users worldwide. As of October 2024, Flippa had 396,000 active buyers on its platform with a combined wallet of $75 billion, an increase of 15,000 active buyers month-on-month.

This broad, engaged user base gives Indian entrepreneurs a diverse pool of acquisition targets, from digital properties to app-based ventures. Notably, data-driven app acquisition companies like KalaGato leverage Flippa to identify the right opportunities. “If you’re trying to get into the market, a platform like Flippa is a great place to start,” said Aman Kumar, Founder of KalaGato.

Cutting Edge Technology At Work

Flippa’s technology sets it apart, using a proprietary matching algorithm powered by an AI-driven graph neural network that assesses over 100 factors to match buyers and sellers.

This technology streamlines the acquisition process, helping entrepreneurs find suitable opportunities more efficiently, especially in a crowded market like India, where navigating business brokers or directly approaching potential sellers can be time-consuming and fraught with challenges.

“Flippa as a platform is continuously evolving. Once you start looking at exits or the potential to exit a business, then a platform like Flippa is super useful,” Kumar adds, emphasising the platform's adaptability to the needs of modern entrepreneurs.

Another standout feature is its multi-user Deal Room. This comprehensive digital sales hub allows users to manage the entire sales process for online businesses and digital assets in one place. Sellers can communicate with buyers in real time, filter messages, and review offers and Letters of Intent (LOIs) within the Deal Room itself.

This organisation is particularly helpful for entrepreneurs who may be overwhelmed by the volume of inquiries when trying to sell their business. The Deal Room provides real-time notifications about buyer engagement, ensuring that users can respond promptly and keep negotiations moving forward. Buyers are invited to the Deal Room on a scheduled basis, creating a structured interaction environment.

Prioritising Security and Trust

A secure transaction environment is crucial, especially for entrepreneurs new to acquisitions. Flippa’s insurance policies offer this layer of security for both buyers and sellers.

The Buyer Protect policy safeguards buyers against financial losses resulting from seller misrepresentation or breaches of warranty, covering up to 100% of the enterprise value of the business. Meanwhile, the Seller Protect policy shields sellers from potential financial losses, creating a balanced environment for transactions.

This dual protection reinforces trust and allows the involved parties to focus on growth without worrying about potential hidden risks.

Market Insights for Informed Decision-Making

To further assist users in making informed decisions, Flippa Market Insights provides valuable data on online businesses and digital assets. This tool enables users to compare prices of similar businesses, benchmark performance metrics like average order value and customer lifetime value, and access real-time sales data, including historical performance information.

Users can filter this data by time period, business model, and price point, ensuring they have the insights needed to navigate the acquisition landscape effectively.

Flippa’s expert vetting team reviews the stated financial performance of every asset priced above USD $50,000, providing an additional layer of credibility to the listings.

A Bright Future for Micro-Acquisitions in India

With the Indian startup ecosystem thriving and the appetite for micro-acquisitions only expected to grow, Flippa stands at the forefront by connecting ambitious entrepreneurs with the resources they need to succeed.

Whether you’re an established business owner looking to expand your portfolio or a newcomer eager to dip your toes into entrepreneurship, Flippa offers a wealth of opportunities in this exciting landscape.

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Disclaimer: This article is generated and published by the Insider Studios team. You can get in touch with them on insiderstudios@businessinsider.in