Smobi - Zillow for SMB Acquisitions

Company & Team Introduction

Smobi is building the most complete SMB acquisition marketplace in the world. The landscape of SMB acquisitions today is riddled with flaws; seller listings are short and uninformative, and many marketplaces are filled with “buyers” who are constantly kicking tires and lowballing sellers. Smobi wants to redefine how businesses are bought by leveraging software and maintaining high-quality, informative listings for the sellers and an engaged community of serious buyers. The company has an impressive founding team, including Kunal Puri (CEO) and Michael Ning (CTO). Both have impressive past resumes, with Ning graduating with a CS degree from Virginia Tech before working as an engineer at the AI startup Dover. Puri previously worked as a software engineer at Amazon after graduating from the Georgia Institute of Technology. Started in 2023, this young startup’s team is just the two founders, and the company is headquartered in New York City, New York.

Product Overview

Smobi’s marketplace was created to improve the SMB acquisition process and make it attainable for anyone to buy a business. To make an intelligent SMB acquisition, you need all possible data available to truly understand the company. This is difficult to find when business listings are routinely incomplete, missing critical information about business operations, essential metrics, or verified financial statements vital to understanding the business's health. Smobi has been designed from the ground up to solve these frequent issues. Their marketplace is highly vetted on both the buyer and seller sides, with each Smobi listing equipped with comprehensive business insights, financial records, and performance metrics. Buyers’ funds are verified to avoid lowballing/tire kicking.

Total Addressable Market

The SMB acquisition market is one of the biggest in the world. There are an estimated 400 Million small businesses worldwide and 32.5 Million in the United States alone. The SMB classification accounts for a staggering 99.9% of all US businesses. Due to the high levels of variability between each unique business, it is hard to quantify the size of the market Smobi is tackling. Still, it is clear the opportunity in front of them is large enough to be venture-backed, even if the company captures a small percentage of the market.

Business Model & The Numbers

Currently, Smobi’s marketplace is free for buyers and sellers as the team focuses on building out a base network of both high-quality supply and demand with all the information needed to make the right acquisition decision. There is an option for buyers to upgrade to their Smobi Search plan for $99/month, which gives further 3rd party data and access to exclusive listings. Other potential monetization opportunities include charging a one-time fee to create a listing or a % transaction fee when a business is sold on the platform. Data shows that up to 70% of business owners will retire within the next decade; Smobi will help these people find engaged buyers who want to continue building the businesses many of these people have spent their whole life creating and get fair value for the asset as well.

Traction

Early traction for Smobi has been promising. Their marketplace is already home to over 700 SMBs listings looking for new ownership, and new buyers and sellers are added daily.

Competitors

Smobi’s focus on brick-and-mortar businesses helps to differentiate its platform from many of the marketplaces trying to build marketplaces for digital businesses like SaaS, Marketplaces, Newsletters, Digital Products, etc, like Acquire.com, Flippa.com, and Microns.com. Even with their defined niche in the market, competition is fierce. Here are some of Smobi's biggest competitors.

BizBuySell - Started back in 1996, BizBuySell is the largest SMB acquisition marketplace in the world. The company is home to the most SMB listings (65,000+), web traffic (15M visits/month), and users than any other platform in the space. BizBuySell had over 2200 businesses sold on their platform in Q3 2023, with a total aggregate value of 1.65B, up 4% from last year. BizBuySell was acquired by LoopNet in 2004, with the combined entity acquired again in 2012 when CoStar Group acquired LoopNet for 860M. The BizBuySell team has grown to ~33 employees and is headquartered in San Francisco, California.

BusinessesForSale - Started in 1995, BusinessesForSale is another major competitor in the brick-and-mortar SMB acquisition space. The company is home to over 59,000 listings and attracts over 1.2M buyers and sellers monthly. BusinessesForSale also gives their sellers valuation tools to help them understand the business's true worth. Access to the company’s listings is free, but users can upgrade to their premium plan at $25/month or $145/year to access premium “locked” listings, access to immediate contact information, and priority customer support. The company is headquartered in London, London and has a team size of ~12.

Funding

In less than a year since Smobi’s founding, the company has already attracted some of the biggest names in the startup ecosystem, including being accepted to Y Combinator’s accelerator and receiving a standard 500K SAFE investment from YC. Smobi has also raised an undisclosed amount of further funding from Twenty Two Ventures, a firm with expertise in marketplace businesses backing success stories like the Livestream shopping site WhatNot.