Investment backed by leaders from Financial Services, Fin Tech and Media from Frost Brooks’ unrivalled network of powerful family offices and HNW individuals
New financing will help support BizEquity’s international expansion plans including a full UK launch early in 2015
Frost Brooks, the boutique private equity firm co-founded by Miles Frost, formerly of LDC and Peter Brooks, former CEO of Sovereign Capital, has completed its second deal with a significant capital investment for BizEquity, the world’s leading online provider of business valuation services.
The new investment included commitments from Frost Brooks’ founders and also from the firm’s high-calibre network of limited partners made up of powerful family offices and HNW individuals, including Sir Victor Blank, Baron Davies of Abersoch, Herbert Siegel, Sir John Peace and Ben Goldsmith.
It will help US-based BizEquity, which already has a presence in London and Singapore, to accelerate its expansion strategy, which includes a full UK launch in first quarter 2015 followed by planned roll out across Europe, Asia Pacific and North Africa. The market opportunity is significant: there are some 200 million businesses globally and less than 2% value themselves annually largely due to the time and cost constraints.
BizEquity has created the first and leading online business valuation platform, Valuation as a Service (VaaS), and has valued more than 27 million businesses, with a range of turnovers between £50,000 and £200 million worldwide. The algorithmic valuation system that drives the platform has over 60 patents pending and eight patents already granted. The accuracy of its valuations is supported by regular benchmarking against previous valuations and constant positive feedback from its subscribers.
The platform provides company owners with a simple and reliable service to give them insight into the fundamental question about their business, what it’s worth, at a fraction – less than 1/10th – of the typical £5,000 cost and typical time – 4-6 weeks – it takes traditional business valuation firms to undertake the same process.
This helps to optimise business owners’ decision making over a range of areas, including finance, insurance, employee rewards etc and helps to ensure they adopt appropriate growth strategies. Last month, the newest version of the platform was launched with enhanced functionality at Finovate in New York, one of the largest gatherings of leading financial technology companies globally as one of the top Fintech startup companies in the U.S.
In the U.S. BizEquity has secured a number of innovative and market-leading businesses as clients, such as Metro Bank, Experian, Dynasty Financial Partners and Bryn Mawr Trust Bank, while in the UK BizEquity’s clients include LawBite, the pioneering legal services start-up democratising access to high-quality analysis and negotiation, global networking and start-up expert firm Entrevo, and Action Coach, the international award-winning coaching company with over 1,000 offices in 46 countries.
BizEquity was founded by Michael Carter in 2010. Carter, a former venture capitalist, conceived the idea with the support of a leading financial institution and leaders in the accounting, finance, venture capital, and technology arena. The business has legendary US software investor Peter Musser (Founding investor behind Novel and Comcast) and Clarence Davis, former COO and CFO of AICPA (America’s biggest association of accountants) as its two co-Chairmen.
Globally the business valuation industry is set for accelerating growth. It is supported by some powerful key drivers, including rising corporate profits, an increase in corporate activity, easing of credit conditions, stronger economic growth in the US, in the UK and other regions such as Asia as well as increasing demand from the growing number of business owners, the so called ‘baby boomer’ generation, that are looking to retire in developed economies such as the US and the UK.
Examples of companies in parallel areas, which have had great success in using online algorithms and methodologies include credit scoring market leader Experian, Zoopla, the online property valuation portal that earlier this year listed at a value of close to £1 billion, recently launched DueDil, which is now the largest source of private company information in the UK and Ireland and Nutmeg Wealth Management, the UK’s first online discretionary investment management company.
BizEquity and all the above businesses illustrate the vibrancy and fast-paced expansion of the global FinTech sector. Investment in financial technology ventures globally was around £600 million in 2008 and is expected to rise to around £5 billion by 2018 according to Accenture. The UK and Ireland are at the forefront of this trend: FinTech funding in the UK and Ireland has grown by 51% annually over the past five years. In the UK alone, there are estimated to be some 135,000 financial-services technology workers and the UK FinTech market is now estimated to be worth over £12 billion.
London is increasingly seen as the world’s leading FinTech hub, with the Capital’s TechCity home to an array of business looking to revolutionise financial services – 32 of the most successful companies in the FinTech 50 Europe watchlist are London-based and FinTech incubators, such as Level 39 and FinTech Innovation Lab are helping to enhance the opportunities for FinTech companies to thrive.
Miles Frost, Managing Partner of Frost Brooks, commented:
“BizEquity is a fantastic business with a globally scalable disruptive technology that has already been tried and thoroughly tested in the US market where its platform has valued over 27 million businesses. Our capital raising will help accelerate the firm’s international expansion and make its unique, cloud-based valuation platform available to an increasingly global client base of businesses.
The question ‘What’s my business worth?’ is in every business owner’s heart. It’s a question that today needs a global, data-driven understanding to answer accurately. BizEquity is unique in being able to do this. Their understanding of what such a complex question means, and approach to answering it simply is unparalleled.
We are always rigorous and patient in assessing an investment opportunity. BizEquity is only our second investment in two years, and is an outstanding company with excellent potential. Frost Brooks is completely independent: as we always invest personally in every deal our interests are completely aligned with the businesses that we back.
In Michael Carter we have backed one of the most impressive entrepreneurs in FinTech globally. Under his leadership and with the power of his product, the future of BizEquity is really exciting.”
Michael M. Carter, CEO of BizEquity, commented:
“We very much look forward to working with Frost Brooks to help further enhance our services and support the company’s international expansion. The group of investors the firm has assembled include some of the most powerful names in British business and they will undoubtedly add significant value, contribute strongly to our future growth and help reinforce our position as the world’s leading cloud-based business valuation service.
Giving companies an easy and reliable platform to assess their worth gives them the insight into the fundamental question relating to their business and helps them ensure that the strategies and plans they implement are the most appropriate to help further their growth and success. It is an exciting time for BizEquity as we look forward to our full launch in the UK early next year followed by a planned roll out in other key regions to give companies all over the world the opportunity of using our service. Business valuation is a multi-billion dollar market category that we are democratizing by putting it online and making it accessible to the masses.”