TX Markets consists of its marketplaces, as well as central teams, composed of experts who are there to support and assist each portfolio company in their activities. The TX Markets Mergers & Acquisitions (short: M&A) team is one of the five central teams at TX Markets. They have three distinct areas of responsibilities that contribute to the growth and expansion of the company. We talked to Fabian Meier, Senior Associate of M&A and Ventures, who was able to provide great insight into what the M&A team does on a daily basis and how TX Markets shapes the startup landscape as an early-stage investor.
The M&A team's core responsibility is traditional M&A with the objective to achieve growth and synergies across our portfolio by acquiring minority or majority stakes in leading marketplaces or classified platforms based in greater Europe. This includes the development of an acquisition strategy, financial and commercial due diligence, supporting contract and price negotiations as well as the post-merger integration of the acquired company.
The M&A activities are complemented by the regular support of our portfolio companies in strategic and operational projects, such as assisting the yearly strategy process or assessing new revenue opportunities.
Last but not least, the M&A team scouts and looks to invest in early-stage startups. Fabian Meier answered some of our questions to better understand how TX Markets is contributing to and shaping the startup ecosystem in greater Europe.
Q: TX Markets holds leading positions with several of its marketplaces and classifieds platforms. Why have you decided to additionally focus on investing in early-stage startups?
Fabian Meier: Marketplaces and classifieds are considered especially hard to disrupt due to their strong network effects. However, history has shown that no industry is safe from disruption, especially ours where change has only been accelerating over recent years due to strong global competition and new players entering the market every day. To stay ahead of the game, innovation has always been a top priority at TX Markets with our product, marketing and tech teams constantly pushing for new state-of-the-art solutions. Our early-stage/startup investment activities are part of this overarching innovation strategy: Investing in startups allows us to expand our ecosystem in core strategic areas while getting early access to new trends, business models, capabilities and technologies. Venture investments enable us to innovate our current business and to collect market and product insights without having to make high investments.
Which sectors are you focusing on and what characteristics are you looking for when scouting for early-stage investment opportunities?
F.M.: We are looking for startups in the marketplace & classifieds space including adjacencies such as proptech, autotech, hrtech out of greater Europe. Our sweet spot is seed and series A, but you can contact us at any stage. The closer the business model is to our existing portfolio companies the better
It is also possible for our portfolio companies to directly invest in or even acquire startups. In this case, the only investment criteria we have is that the company has a high strategic fit.
As far as assessing the startups goes, we largely look at the same characteristics as other investors: do we like the business, the product, the team and so on? However, what separates us from a traditional venture capital investor is that we also consider how a startup fits within our strategy, the synergies we can leverage and how the business can help us to strengthen our portfolio.
What are you most excited about in the marketplace & classifieds industry?
F.M.: Even though the trend has been going on since the creation of the first generalist classifieds website, I'm still very excited to see the continued verticalization of marketplaces due to two reasons: First, because vertical marketplaces often offer a user or customer experiences in a way generalists just can't, meaning it's easier to find goods and services, thereby making life easier for the customer. Secondly, from an investor point of view, the enhanced user experience, the possibility for additional services such as authentication and the increased matching of supply and demand, made possible by the structured data of vertical marketplaces, allows us to capture a higher share of the revenue. So I truly believe that verticals will continue to be a win-win for users and businesses alike.
TX Markets as an attractive early-stage investor
Long term partnership
Compared to traditional financial investors, our goal is not to maximize growth at all costs in order to maximize the exit valuation. Instead, we are interested in helping to create sustainable businesses.
It's always up to the founders to define how they want to work together with us. However with our over 80 in-house experts in the areas of product, tech, marketing, data analytics, strategy and business development we do have the knowledge and resources to create a lasting impact.
We generate over 40m clicks per month and all our platforms, including the ones from TX Group, reach over 80% of all Swiss households. Depending on the needs of the startups, this reach can be leveraged through significant advertising discounts.
We thank Fabian for his insights and if you are a startup that ticks the above-mentioned boxes, you can submit your startup pitch here.