M&A in the expert network industry

Max Friberg
CEO at Inex One
- Market, Business
Expert networks are key data providers for M&A deals. But did you know there are deals among them, as well?

Expert networks have attracted investments from well-known buyout firms Silver Lake, IK Investment Partners, Permira, Astorg and SFW Capital. The industry seems resilient to the current pandemic, and has kept growing even through 2020. Read our review of all material deal activity (M&A, fundraising) in the expert network industry.

2000's: The US-based industry gets organized

The first expert networks started out in the late 1990's, serving US buy-side firms. For the first decade, the deal activity focused on "where they'd fit". Both investment banks (GS, Bear Sterns, Leerink) and data providers (S&P, Evalueserve, Reuters) acquired or started their own expert networks.

2004

πŸ’΅ GLG took $30m from Bessemer Venture Partners. At the time, the expert industry was nascent, with only a handful players. Full details on GLG’s funding history here.

2005

🀝 S&P bought Vista Research for $30m or perhaps $40m. At the time, Vista and GLG were the two leading networks. Goldman Sachs had considered buying the latter, but backed out due to pricing issues and potential compliance liability issues.

2007

πŸ’΅ GLG took a $200m investment from Silver Lake, at a supposed $875m valuation.

🀝 Evalueserve acquired Nitron Circle of Experts.

πŸŽ‚ Having passed on GLG, Goldman Sachs started its own network: Vantage Marketplace. Despite this not being an M&A deal - or that the firm never really got off the ground - the website is worth a mention. A blast from the past!

2009

🀝 Guidepoint bought Vista Research for $10-13m, or even $15m. S&P booked a $14m loss on the sale.

🀝 Primary Insight spun out through a management buy-out. The firm had started in 2005 as an in-house expert network at Bear Sterns.

2010's: The international landgrab

As the industry grew, new expert networks sprung up. A host of firms emerged in the late 00's, focusing on custom-recruiting on LinkedIn. Some of them (notably Third Bridge, Alphasights, Capvision and Atheneum) went on to become global players, others were acquired. The early years were overshadowed by the US insider-trading probes, and subsequent investments in and standardization of expert network compliance programs.

2010

🀝 Third Bridge (named Cognolink until 2015) acquired Epito, a Swedish expert network, for an undisclosed sum.

2011

🀝 Business Connect China (BCC) bought Circle of Experts from Evalueserve, and the small US-based Tribeca Insights. Sum unknown.

2012

πŸ’΅ Third Bridge raised approx. $4.5m from Beringea at an implied valuation of $35m post-money.

2015

πŸ’΅ GLG bought back the Silver Lake stake, and took $212m from SFW Capital "at an enterprise value in excess of $700m". Silicon Valley Bank provided a $250m credit line.

🀝 Guidepoint acquired Innosquared, a German expert network, for an undisclosed sum.

πŸ’΅ Atheneum raised €10m at a €50m valuation from Vogel Business Media and business angels.

2017

πŸ’΅ Third Bridge raised an undisclosed amount from IK Investment Partners, with support from Permira Debt Managers. IK also bought out Beringea’s stake from 2012. The reported share premium account increased by $45m, and long-term debt (>1 year) by $36m.

πŸ’΅ Lynk (formerly The Straits Network) raised $4m to expand its APAC-focused network.

2018

πŸ’΅ Atheneum raised €10m from Crosslantic Capital Management.

2019

πŸ’΅ Lynk raised an undisclosed amount, having previously raised $4m in 2017.

πŸ’΅ Deepbench raised an undisclosed amount from Macquarie Bank, as part of licensing its platform to them.

2020

πŸ’΅ February – Techspert.io (UK) raised $5m in a round led by Nauta Capital.

🏦 March - VisasQ (JP) went public on the Tokyo stock exchange.

🀝 May – Uzabase (JP) invested $2m in GlobalWonks.

🀝 July – VisasQ invested $300k in DeepBench.

Both VisasQ and Uzabase are listed in Tokyo, and both firms cited a need for increased global reach and access to better technology as their investment theses.

πŸ’΅ Sealed Network raised $1m.

The 2020's: Tech innovation and diversification

At the start of the new decade, a number of technical novelties have been introduced, while incumbents have diversified into new products. Inex One partners with many in this next generation of expert networks, matching them with relevant client business, validation, and productivity tech.

2020

The Covid-19 pandemic led to a sudden halt in business for expert networks, and then an unprecedented investment boom that boosted the industry to new levels. All in all, the market grew +10-15% despite the pandemic. Many expert networks raised funds off the back of this.

2021

πŸ’΅ January - Lynk Global raised $24m

πŸ’΅ January - Prosapient raised Β£7.3m

🀝 January - Astorg and company founders bought a Third Bridge stake from IK Investment

πŸ’΅ February - Office Hours raised $5m

πŸ’΅ March - Arbolus raised $6m

πŸ’΅ March - Expertwired raised €1m

🀝 August - VisasQ acquired Coleman Research for $102m (still subject to shareholder approval).

πŸ’΅ August - Atheneum raised a whopping $150m led by Guidepost Growth, a firm entirely unrelated to the expert network Guidepoint.

πŸ’΅ August - Inex One raised $3m to continue scaling its global expert network marketplace. As of the funding announcement, Inex One serves more than 200 client firms, working with 20+ top-performing expert networks worldwide.

πŸ’΅ September - Lynk raised $5m from UBS in a bid to cross-sell UBS analysts as experts on Lynk.

Will we see more M&A deals in this decade? Most likely. Want more insights? Contact us. Want to access the best experts? Sign up here. You might even find me as an expert. πŸ˜‰

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