Large M&A deals don’t at all times involve the hottest industries or corporations.
A great example is last week: Software Investor Hg announced it might pay greater than $3 billion to acquire the audit platform provider revision Committee. Given the slow period for large mergers and acquisitions, the deal is the largest purchase of a U.S. venture-backed private company in 2024, according to Crunchbase data.
If AuditBoard is a name you have never heard of, you are not alone. While the Cerritos, California-based company has an enviable track record – profitable, with annual revenues exceeding $200 million – this was not a major fundraising effort. During a decade of activity it grossed a total of $43.6 millionlifting the last one Battery ventures-led the round back in 2018.
AuditBoard has also managed to go unnoticed for the obvious reason that it is an audit and compliance software company. This is not a area of interest where well-known brands are created.
VCs like audit and compliance
While it might not be a particularly popular space, startups focusing on financial compliance and auditing are highly regarded among enterprise capitalists. Their interest coincides with a mini-boom in financing for accounting firms, several of which have raised large rounds this 12 months.
Specifically with respect to audit and compliance, some of the most recently and heavily funded names include:
- DataSnipperbased in Amsterdam, provides tools to increase productivity in the field of audit and finance. USD 100 million was collected in this manner B series in February under the leadership Index ventures.
- Manager, with offices in New York and Paris, it offers a quality assurance platform for finance teams that features audit analytics tools. On Tuesday, the company announced in a funding round led by. raised $22 million Orange ventures.
- FloQastbased in Sherman Oaks, California, counts former auditor, Mike Whitmireas co-founder and CEO. The 11-year-old company selling tools for automating accounting and compliance processes has acquired over $300 million for nowincluding April’s $100 million Series E led by Iconiq development.
- Kintsugi AI announced Wednesday that it has raised $6 million in a Series A round led by it Connect ventures. The San Francisco-based startup says its platform helps corporations simplify tax compliance through AI-powered automation.
Big money in tools for boring jobs
In the wake of AuditBoard’s $3 billion exit, it is time to also consider the second-largest venture-backed M&A deal this 12 months. OpenGovsupplier of software that improves the operations of presidency institutions, sold to an existing shareholder Cox Companies at a valuation of $1.8 billion.
A standard feature of each acquired corporations is that they operate in industries – audit and govtech – that are not conducive to exciting conversations. Most people want to spend as little time and energy as possible on things like verifying financial reports or contacting the Department of Motor Vehicles.
It is probably no coincidence that corporations offering ways to perform these kind of boring and often complicated tasks more easily and efficiently enjoy great interest from buyers. You can make money by using software that performs tasks that you simply would not want to do yourself.
Public and private investors seem to agree. Intuition — a pioneer in tax and accounting software — is today a public company value roughly $170 billion and trading near an all-time high.
On the M&A side, tax compliance software provider Avalaraone of the newer generations of venture-backed space corporations sold to a company Vista Capital Partners for USD 8.4 billion in 2022. A few years earlier, it conducted a successful public offering.
They may not be the hottest corporations or industries. But in the toned-down environment for M&A startups, they are not just giving it their all.