Micro M&A for SaaS Startups

Almost every founder is currently complaining about difficulties in acquiring new customers. But that doesn't mean you have to bury your head in the sand.

Times like these are made for growth hackers. A good time to find creative ways to grow off the beaten track.

From my perspective, a very underrated strategy for small SaaS companies is strategic M&A.

I'm talking about micro acquisitions of lead generation tools / traffic sources, not buying a direct competitor for millions.

Let me show you two concrete examples from the "lucky shots” category.

Taplio + Viral Post Generator

In 2023, Tom Orbach scraped 1000s of viral LinkedIn posts to reverse engineer these high-engagement posts and reproduce them to go viral himself.

That’s when he came up with the idea of creating a parody tool that uses AI to generate “viral” (= cringe-worthy) posts based on users’ inputs.

The Viral Post Generator was born.

Just a few days after the launch, he was contacted by Tibo (founder of Taplio) re acquisition.

Tom initially asked for a high price, which Tibo didn't want to pay, so he suggested adding a Taplio affiliate link for 24h, and depending on how it goes, agreeing on a price.

The tool went viral overnight - with 1.4 million users and many of those sharing their posts online. As you can imagine, this also generated numerous leads for Taplio.

Before the 24h time window elapsed, Tibo messaged Tom and accepted the initial price, so Tom sold.

It was a perfect fit for Taplio, and even now - months later - it still serves as a great source of traffic. See Tibo’s feedback below.

If you want to read the full story, you can do so in Tom’s own newsletter (sign-up recommended).

Seobility + OnPageDoc

In 2019, Seobility decided to acquire a smaller competitor - a SEO tool called OnPageDoc - including a few satellites (e.g. this one) that served OnPageDoc as traffic sources.

After the acquisition, they announced the shutdown of OPD on the website, linked to Seobility and offered existing customers special conditions for switching before taking off the website. They kept the satellites though.

In the meantime, Seobility has sold one satellite and continues to use the others as a traffic source.

The cost for all assets was << $100k, while the revenue from referrals and migrated customers now adds up to a mid 6-figure sum. An ROI of ~6x.

Apart from the acquisition of small online tools as in the examples above, there has been a trend among large SaaS companies to buy relevant media companies.

This also works on a smaller scale. You can buy newsletters for less than $5k. The more niche and tailored to your ICP, the better.

It’s a great way to attract a large and highly-engaged audience for very little (or at least manageable) cost. Some advice if you are considering that path:

As you can see, it is worth looking left and right from time to time to see what you can pick up “cheaply” and leverage for your own startup’s growth. Maybe you even have a few things in mind already.

Don’t be afraid to send the owners a short message to inquire about their situation and their interest in a possible sale. I can say from experience that sometimes - unexpectedly - great opportunities arise.

It can also be worth scouring popular M&A platforms for small complementary SaaS businesses that can serve as a standalone business for cross-selling, as a free tool to drive traffic, or as an additional feature to your existing product (i.e., technical integration).

Sometimes it is easier to buy something than to develop it yourself (common practice at giants like Microsoft, Salesforce etc.).

The platforms are full of under-optimized, non-monetized indie hacker SaaS projects looking for a buyer. The acquisition process is often guided and super simple.