SaaS market intelligence helps PE firm achieve a 25% return
Posted by | Fuld & Company
A top enterprise SaaS investment firm sought to evaluate investment opportunities in niche software markets. Specifically, the firm aimed to assess the market size and potential for workforce management software for part-time workers in the events industry, and point-of-sale (POS) and merchandise management software for events and venues. To support these potential investment decisions, the firm engaged Fuld to conduct in-depth research and analysis.
Objective
A Private Equity firm sought to make an informed investment decision regarding two potential opportunities. They required an evaluation of the market size, revenue potential, and competitive landscape of two software sectors to determine their viability for investment.
Solution
Workforce management software market
Fuld analyzed the revenue model, which operates on an hourly software usage rate for event management companies, covering:
- Opportunity assessment: Identified the total number of venues in North America (e.g. stadiums, music halls, theaters) and categorized them by seating capacity to estimate the annual number of events hosted.
- Operational dynamics analysis: Gathered insights into the average number of part-time workers required per event and their working hours.
- Market size estimation: Calculated the market size by factoring in the number of events, workers required, working hours, and the software provider’s hourly rate.
POS and merchandise management software market
Fuld evaluated the revenue model based on the take rate applied to credit sales from food and beverage (F&B), and merchandise transactions at events. Our analysis included:
- Opportunity assessment: Identified key event types in North America, such as trade shows, music festivals, and tours, that rely on POS and merchandise management software.
- Revenue analysis: Assessed the revenue streams by analyzing the percentage of F&B and merchandise sales at these events, and the proportion of transactions processed via credit cards.
- Market size estimation: Estimated the market size by aggregating revenue across event types to determine the potential for software providers.
Outcome
Fuld’s market analysis provided the firm with clear, research-based, actionable insights to inform its strategic investment decisions. These findings highlighted growth opportunities within the North American market and supported an acquisition strategy. As a result, the firm invested in one of the two target companies, recognizing its strong growth potential. During the investment period, the firm achieved an annualized return of over 25%.
Tags: Competitive Intelligence, Competitive Strategy, Enterprise SaaS, Market Analysis, private equity
