Software as a Service (SaaS) and e-commerce businesses that are fulfilled by Amazon (“FBA”) led the technology M&A market in 2020 and are expected to do so again in 2021, according to a new report by online M&A advisor FE International.
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Last year, the global pandemic led to a dramatic increase in both the number of businesses operating online and in the number of consumers shopping online. Merchants looking to start up their e-commerce stores flooded platforms like Shopify, which allows anyone to set up an online store and sell their products.
The shift in buying trends cascaded to the technology M&A marketplace, where FE International saw Shopify app business deals increase by 25% in 2020.
Similarly, FE also saw an increase in sales value of FBA businesses, which rely on Amazon to store, sell and deliver a third party’s inventory for a fee.
“This is an excellent time for SaaS and FBA business owners who might be interested in selling,” said Ismael Wrixen, executive chairman of FE International. “In particular, FBA businesses saw significant gains in both multiples and in buyer competition in 2020. In other words, our FBA business sellers got more for their money in 2020 than ever, and this trend will likely continue in 2021.”
According to the report, e-commerce sales multiples increased by 19.1% from 2019 to 2020, while SaaS sales multiples saw an increase of 5.6% during that period.
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