Whether its P2P lending platforms connecting borrowers and investors, AngelList’s Syndicate product which allows accredited investors without connections to startups to access deal flow, or equity crowdfunding which has even entered the space of public firms, there is very little of the traditional banking and M&A sector that isn’t being encroached by modern Fintech services. Adding to that list is Exitround, which has announced a new unit called Exitround Capital.
Operating an M&A marketplace for technology firms, Exitround matches companies looking to sell with potential buyers. Companies that are interested in selling can list their firm on the platform to gain interest from buyers, as well as to explore potential partnerships with larger players in their space. For buyers, Exitround uses technology to identify potential targets on their platform.
Initially founded as a marketplace for handling early-stage technology acquisitions, Exitround Capital extends the company’s existing coverage to also include profitable companies from other industries. With a requirement of firms to have between $3-$100M in annual revenue and positive EBITDA, Exitround Capital focuses on matching private equity firms with prospective sellers. In announcing the launch of the new product, Exitround explained in their blog that marketplace evolved from early-stage technology firms to also include larger and profitable companies. This in turn led to increased interest from private equity firms using the Exitround to find acquisition targets. According to Exitround, the larger profitable firms “were receiving relatively high amounts (6x the normal amount) of engagement from private equity buyers in the Exitround marketplace."
Upon launching Exitround Capital, the firm announced that Symphony Technology Group and Andlinger & Company are special launch partners, with an additional 210 private equity firms already active on the platform.
In terms of the larger investment banking industry, at this point of time, Exitround is being seen as filling a gap that traditional advisory firms aren't active in. The result is that the marketplace provides value for sellers and investors but as of yet isn't impacting the businesses at investment banking desks.
On Exitround's role in the market as it relates to the competition, Karl Antle, Partner at ValueStream Labs, which is viewed as one of the leaders of cultivating the fintech sector in New York stated to Forex Magnates, "I don’t think anyone in the traditional M&A market thinks they are being encroached upon – bankers add value to larger transactions and will continue to do so. However, the creation of small, innovative companies is at an all-time high - everyone is eager to find a better way to stay close to this end of the market. Many of the firms we’ve talked to see Exitround’s product as a cost effective way to tackle a part of the market they struggle to cover today."
