In ComunidadFeliz, we want to be the market leader as we see many monetization opportunities after introducing the SaaS product into condo complexes and buildings. One example of this is the payment processing feature. Currently, we charge a monthly fee for the SaaS but additionally, we charge 1,5% (approx.) with every payment, this accounts for 30% of our revenue and it’s growing at least 10% every month and we’re getting around 45.000 transactions out of our 500.000 registered properties so there is a huge opportunity there. Furthermore, we’re introducing insurances into our product list, this is just starting but we see the potential of tripling our revenue just with this product. For these reasons, our value per customer is far greater than for any competitor, which is why we want to buy a competitor, specifically in Chile (you can still work from México, but the target is a company in Chile).

Project Address: Jalapa 100 Roma Nte., Cuauhtémoc, 06700 Ciudad de México, CDMX, México

We already have identified the best competitor to acquire, the main reasons we see this one as a correct target is:

- They charge a very low fee for the SaaS product making his market space, the one with big property managers (more than 20 buildings under management) and is our worst market because we don’t do bulk discounts, we work on the market space where you can charge 4x but you have to give more support (small property managers).

- The founder of this competitor company has been in the market for 15 years, but it’s not a software expert. His main business is a distribution company for products that building need to buy (like paper, disinfectant, plastic bags, etc).

- The founder of this competitor company talked with one of our investors (not officially) and he literally said, “maybe it’s time to sell I’m only growing 10% a year” (this is private information).

 - He has a base of around 1000 buildings active in his platform. We estimated around 100.000 properties. Comunidad Feliz is in almost 4000 buildings so in terms of clients (not revenue) will be an increase of 25%.

With this context we believe that the activities we’re going to have to do are:

-        Map the step by step of an acquisition in Chile. We haven’t even talk directly with the other founder so we have only partial information.

-        Understanding the best structure for paying (I would conditionate some of the payment to successfully retaining a % of customers, maybe even in trenches).

-        Planning the financial and legal due diligence.

-        Structuring the HR solution to keep the best talent and how to layoff the worst talent.

-        Maybe a full adquisition is not even the best choice, maybe we should buy the customers and make them close their company.

-        Drafting and planning the Intellectual Property, the non-compete and the ownership system with the corporate structure that ComunidadFeliz has.

I’m sure there are many steps missing from this proposal as we don’t have any experience buying companies.

We have secured the financing for this project; however, we haven’t mapped all the steps to follow up on the project. Success for us would be able to close this deal during April 2023 and the successful transition of everything ready at most in a 6 months period.