Smaller companies looking for exits in the UCaaS space are seeing multiples of about one-two times revenue. As these companies get larger, the multiples increase. This law of large numbers is not exclusive to UCaaS – it also plays in many services businesses like dentistry, podiatry, etc.
It is why there is a thirst to acquire. Cheap money and expanded multiples as you grow fuels the market for M&A and then the financial results of these transactions find their way back into startups as seed rounds, Series A, etc.
We suspect these are some of the reasons behind the latest news of the UCaaS day.
UCaaS vendor 4Voice with a focus on small and medium-sized businesses announced the acquisition of nexVortex’s hosted voice business.
We broke the news last September that nexVortex launched mConnect SD-WAN for smaller businesses. At the time we told you:
mConnect uses nexVortex’s patent-pending QAV technology to deliver a better cloud experience by managing the customer’s WAN circuits. It does this by improving service resiliency, increasing the connection quality, and providing greater visibility into operations; and, with more efficient management of network resources, operational costs are driven down.
“nexVortex’s expertise in hosted voice services and geographical reach will accelerate our ability to deliver high-quality, cost-effective solutions,” said Amruth Laxman, CEO and founding partner, 4Voice. “Both nexVortex and 4Voice share similar missions and are customer-centric companies. Our newly acquired hosted voice customers can be confident that we will focus on supporting their unique needs just as we do with each and every customer we serve.”
As a result of the acquisition, 4Voice will continue to support and maintain nexVortex’s hosted voice business solutions. 4Voice is also acquiring nexVortex’s entire hosted voice team, ensuring a seamless transition for customers and channel partners. The acquisition grows 4Voice’s cloud services business and allows nexVortex to focus resources on its rapidly growing Managed SIP Trunking business.
“We appreciate the trust that our hosted voice customers have placed in us over the years,” said Wes Rogers, chief operating officer and founder, nexVortex. “Our culture of delivering ‘Uncommon Service’ will be continued by 4Voice and combined with an impressive set of business solutions that I know customers will value.”
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