💰 Micro M&A Interview 001: $3M valuation, $25k asking price

Piero Macari tried selling a business once valued at £3M for $25k on Acquire.com. It didn’t sell.

I spoke with him initially because I was interested in buying it. But he was very forthright when he told me that this product requires a very, very specific type of buyer. It wasn’t a fit for me, but I was intrigued nonetheless. He was kind enough to let me interview him about the process.

Here’s what he told me about selling Kasssh. 👇

High-level data

• Asking price: $25k

• Revenue multiple: 25x

• TTM Revenue: $1k

• Expenses: Staff, a bit of tech and very basic marketing

• Customers: 10-100

• Date founded: July 2023

• Tech stack: Shopify, Salesforce, Laravel, PHP, SQL

• Competitors: Paysafe, CashtoCode

• Link to listing: Listing removed

Seller takeaways

• Listing your business on a marketplace doesn’t mean you have to sell.

• $25k is the maximum asking price Acquire.com allows with zero revenue.

• Be honest. Otherwise, you’ll waste your own time and everyone else’s.

• Make sure you’re selling on the right marketplace for your product.

• Don’t wait too long to list. Just put your feelers out and see what the response is like.

Buyer takeaways

• Beware location- and expertise-dependent products.

• Ask sellers how much money is needed to give the product a real try.

• Every product will have upsides and downsides — no getting around that.

• There are options other than full buyouts. Be creative.

The product

James: Tell me about the product.

Piero: Kasssh uses all the latest payment technologies to fully automate and digitize cash payments for online purchases, which is normally physically impossible!

So a consumer checks out for their order and selects Kasssh as their payment option. The consumer then receives an email with a unique barcode requesting cash payment. They take this email to a network of pay-in stores, and once paid, the eCommerce site instantly receives that payment into their existing payment provider.

The business is tech-heavy, fully built, and live. And we have particularly powerful partnerships with Shopify, Big Commerce, Salesforce, and Mastercard.

J: I imagine the nature of this business makes it location-dependent.

P: Right, the company is only set up to work in the UK at the moment. We have a deal with PayPoint, which has 28k agent locations to deposit the cash — that’s more than all bank and post office branches in the UK, combined.

We’re also working on expanding into the US — I am talking to a large provider with a similar network as the UK one. And there are many other networks we can tap into as well for many different markets all over the world.

The Target

J: Who’s the end user?

P: We’re targeting people who use cash.

Contrary to most people's thinking, this does not mean old people; it’s income driven. Those with lower incomes have a high propensity to use cash, mainly for budgeting reasons, or for fear of online fraud. These people pay their utilities, top up their phones, etc. with cash.

So that’s the target consumer market for more developed countries. But the tech enables us to go to other countries quickly, as well, even developing markets

Looking at options

J: Why is now the time to sell?

P: We aren’t completely sure we want to sell. We were just looking at all the options.

Do we raise more money?

Do we strategically partner with other payments businesses?

Do we sell?

As I have learned in life: Always ask the question. So we did.

J: How did you come to your asking price?

P: To be honest, our asking price was never really set. It was more an invitation to discuss. Acquire.com set a limit on how much I could ask for at my revenue amount, so we set it for the maximum — $25k — despite the fact that we raised at a $3M valuation.

Deciding on an actual price, if we sell, will be difficult. But at this point, I’d even sell a majority stake for a small amount to the right buyer — a buyer who can invest in marketing and sales.

Why he’s selling

J: $3M? So you’re getting investment at a high valuation. What’s the problem? Why sell?

P: That was the last round’s valuation. We had revenue but not much. What we need is a big e-commerce retailer in order to increase revenue. And we are in discussions with one, but implementation got pushed back to the end of 2024 or beginning of 2025, which timed us out.

J: And you can find other retailers?

P: The business needs £500k to really give it a chance for 18 months. This would be spent mainly on sales and marketing people. There is a brand push needed. That’s the only way to get more retailers.

We have raised small amounts over the last two years — increments of roughly £50k every few months. But it hasn’t been enough. In fact, I’ve had to pare back on sales and marketing to give us more cash runway. That means low sales. Investors want to see more revenue, but we have no money to enable it. Vicious cycle!

Maybe it’s time to let someone else give it a go.

The selling process

J: Why hasn’t it sold yet?

P: We only just started asking and only put it on one platform. Also, I’m too honest for my own good, as there’s no point selling it if the buyer turns around and gets stuck in the same position as me. It’d be immoral.

The thing is, this is not a product for people who just want to buy it and tweak it.

I keep telling people: I could give it to you for free, but you will need funds to make it work. Either that, or you need to be a super-connected eCommerce/retail guru. And either way, you’ll need to have some knowledge of payments, as this is a regulated industry.

J: Yep, that was enough to give me pause.

P: Despite that, I’ve been surprised by how much interest there’s been. It makes me think that we have built something that is unique and exciting. Maybe it’s founder bias or a small ego stroke, but startups are lonely and hard, so positive voices are well received.

Either way, people seem to like that it’s unique and solves a need — but most are only curious and maybe acquire.com is the wrong platform for us.

Honesty in M&A

J: Not every seller is so honest.

P: I don’t like wasting time, so it’s in everyone’s best interest to be honest about everything with potential buyers.

Yes, I want to maximize the potential of selling Kasssh, but I don’t want to spend ages on a deal where the buyer pulls out or ends up feeling cheated.

All businesses have their good sides and their areas for improvement. If a buyer doesn’t get that, then that is a red flag in itself.

J: True enough.

P: Business is based on trust. If you’re selling something and then in due diligence something comes up that should have been shared, and you knew it, that seed of doubt will cause most deals to collapse.

Takeaways from the selling process

J: What else has jumped out at you through this process?

P: I was surprised to find that, despite being on an acquisition platform, many of the conversations became about investment or purchasing a controlling share, rather than a full buyout.

So there are other options available, depending on the buyer.

And speaking of Acquire.com, I learned that, while it’s a good platform, you have to be particular about where you sell there — Kasssh isn’t a micro-SaaS. It needs deeper pockets.

Advice to sellers

J: Any advice for sellers?

P: Don’t procrastinate, don’t assume. Put the feelers out and see what people think. You don’t have to sell, but you may be pleasantly surprised. 

And don’t leave it too late. If you’re going to sell — or raise money for that matter — it’s going to take 3-6 months. If you’re considering it, then start the process while you still have runway to spare.

What’s next

J: What’s next for you?

P: I’m considering my options. I may keep trying to build Kasssh, or I may keep trying to sell.

I love working with payments so, eventually, going back to corporate is an option. But I’ll ideally try to work for a startup – I have the bug!!

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You can follow Piero’s journey on LinkedIn. And if you have any interest in buying Kasssh, reach out!

Thanks for reading the first Micro M&A interview! Any feedback? I’d love to hear it. Keen to improve as I build this thing out.

-James

Creator @ Micro M&A (newsletter teach how to buy/sell micro-SaaS)
Creator @ SaaS Watch (micro-SaaS acquisition opportunity newsletter)
Creator @ Ancient Beat (archaeo/anthro newsletter)
Contributor @ Indie Hackers
Cofounder @ Solutrean Holdings (acquiring 6 products in 12 months)
Cofounder @ LoomFlows (easy customer feedback via loom)
Cofounder @ reHuman writing agency