London-based Foundy has announced that it has secured a £1.25M round led by Fuel Ventures. Based out of London, Fuel Ventures is a technology fund investing in marketplaces, fintech, platforms, and SaaS companies and has also invested in startups including Guider and Journee this year.
The UK company has built its marketplace to modernise the M&A industry for startups. The company will use the funds to grow its engineering, marketing, and account management teams as it plans to expand its product offering and international presence.
Unlike traditional acquisition processes, which take 9 to 18 months, incur unnecessarily high fees and suffer delays, Foundy claims to reduce the time it takes to buy or sell a company, making it up to 4x faster.
How was Foundy born?
JP Lewin founded Foundy after experiencing the frustrations of trying to sell his first company using the traditional acquisition process.
“After building my last company, an urban transport rental marketplace, to over 30 staff and winning contracts worth seven figures, I finally sold the company, but over a year after, potential buyers first contacted us. The whole M&A journey was a nightmare.”
This first-hand experience has fueled Lewin to create an accessible, easy-to-use marketplace for founders, buyers, and investors.
“We are in the digital era now where founders of businesses, regardless of their size, need access to the right buyer pool and support infrastructure to complete life-changing deals.” Thus Foundy was born!
Online marketplace
The Foundy platform connects buyers, sellers, investors, and M&A advisors to help make the acquisition process simple, safe, and secure.
The company’s platform provides technology startups, including SaaS, eCommerce, and Web3, with affordable access to the UK and international buyer and investor networks, advisory services, and resources to complete rewarding exits for their shareholders.
Foundy’s marketplace allows buyers and investors to discover and cross-compare startup profiles and then immediately initiate conversations on the platform.
How does it work?
According to the company, each seller’s profile is purposefully anonymous on the marketplace, and startups are given control of which buyers and investors have access to confidential information such as financials.
However, startups are required to display key metrics, company highlights, and basic financial information to start conversations with buyers on the platform.
The company also aims to provide expert guides, informative podcasts on the exit process, and legal document templates.
Competitions
The UK company competes with MicroAcquire, Flippa, and Bits For Digits. As the company claims, Foundy aims to capitalise on the first mover advantage in Europe as a VC-backed marketplace as this city is one of the world’s largest and most well-connected startup ecosystems.
“Despite only accepting 10% of startups that apply to list on their marketplace, Microacquire lists hundreds of failing businesses. On the other hand, we want to harness the power of network effects by maintaining high-quality listings. Low pricing and end-to-end support: simplify the process. For over 60% of sellers, this will be their 1st time exiting; therefore, they are attracted to our ‘no deal no fee’ pricing, which is still 3 to 5x lower compared to traditional brokers,” says the company.
Revenue model
As per the company, Foundy makes money through the below means:
- A success fee on the completion of a successful acquisition
- An optional premium subscription for ‘Star Buyers’
- Success fee on the contract value from 3rd party professional advisors (such as accountants and legal advisors) that work with our startup sellers’ clients.
Mark Pearson, the Managing Partner at Fuel Ventures, commented on the investment, “We are excited to support Foundy’s journey. The company will play a major role in the ecosystem as a whole because by helping startup shareholders more easily liquidate their shares via full and secondary buyouts, it will, in turn, incentivise more and more people to both work and invest in startups.”
