Few talent rep and influencer marketing co's of scale remain. ...is what I keep telling buyers who seek acquisitions. Which means that co's with critical mass of revenue and team, and clear growth opps through combination, are premium M&A targets 💰 There’s also an extra premium for IM companies with legitimate proprietary tech. Which enable automated workflows to source talent, matchmake creators with brands, and do campaign management / reporting / optimization. Though be wary here since most proprietary IM tech is just a glossy sheen for underlying managed services. Of note, I believe that the industry and investors need to come to terms with the fact that talent and brand-centric businesses, particularly influencer marketing, will always require meaningful human investment 🤯 It’s just how the industry works, and it’s not a bad thing…it’s just market reality! So for all you buyers out there, just know what this means for sustainable company margins post integration, what realistic synergies are, and where investment must be made to scale IM businesses… These are key questions to ask in diligence! Good advisors can guide you here. Of note, I’ve actually met a few tech-centric IM companies recently that feel different than the rest, and I’m excited to dig into their business performance. Which partially inspired this week's newsletter... I do a breakdown in our newsletter tomorrow on Node App, which just sold to DULCEDO Management. My estimated revenue analysis will highlight the standard business models for IM marketplaces, and the different components of revenue between SAAS and campaign commissions. On a final note... ...while Node and other IM marketplaces have recently been taken off the table (read our blog to track these deals), there are still good M&A targets that exist. Will keep you updated on acquisition opps as they come to market in 2025. You can also signup for our newsletter, where we highlight these deal opps: https://lnkd.in/gsCaH6eM -- I'm the founder of RockWater Industries. We do M&A and strategy advisory for media, agencies, and creator economy. My DMs are open.
We sold to Neoreach/ I think they do well
This is so true… another great post Chris👇👇👇👇 “Of note, I believe that the industry and investors need to come to terms with the fact that talent and brand-centric businesses, particularly influencer marketing, will always require meaningful human investment 🤯 It’s just how the industry works, and it’s not a bad thing…it’s just market reality! “
Thank you for all your work on breaking down deals—I find each one extremely insight and educational.
Loved this rundown! You’re spot on with the tech and manager services aspect!
Wait until you see what we’re building…
the interesting thing im thinking about is how do the tech only and service only companies converge. In many cases, the tech is powering service agencies. Service agencies can build tech but its likely to not be as good as the tech only companies. The service companies could acquire tech (but then what happens with the tech companies clients who are competitors with the acquirer). Also if a tech company acquires an agency, that severely impacts their valuation/financial model. Super interesting to see if the future service agencies need to build their own proprietary tech and if that means more funding needed for tech enabled service co's.