Go Daddy the trendsetter

Contact: Ben Kolada

Shortly after acquiring accounting startup Outright Inc, GoDaddy.com announced that it has picked up mobile website creation startup M.dot for an undisclosed amount. With these two deals, the domain name registration and Web hosting giant is becoming a bit of a trendsetter in its M&A strategy. We’ve been predicting a trend of mass-market hosting providers moving beyond providing simply Web hosting to offering more services for their small business customers.

M.dot provides a smartphone application that enables iPhone users to design and develop mobile websites without any coding. The company, less than a year old, had raised $700,000 in funding from Archimedes Labs, FLOODGATE Fund, SV Angel and angel investors. The deal makes sense since more and more people are more often accessing mobile, rather than fixed, websites.

With M.dot, Go Daddy further reinforces its desire to become a service provider, rather just another website hoster. Usually a pair of acquisitions of small startups wouldn’t merit much attention, but Go Daddy’s dealmaking sets the stage for a trend we expect to see more of – mass-market hosting companies buying their way into services. We’re working on a longer report on this trend that will be published soon.

For more real-time information on tech M&A, follow us on Twitter @MAKnowledgebase.

Accounting for M&A

Contact: Ben Kolada

As accounting software giant Intuit buys beyond its traditional roots, it is leaving the door open for competition from a new breed of accounting startups. A handful of accounting companies have popped up over the past few years in the US and abroad to target consumers and SMBs, some with freemium models. These Davids are walking in Goliath’s giant footsteps, and are announcing a number of their own expansion plays.

Over roughly the past year, accounting startups Wave Accounting (based in Toronto), Xero (based in New Zealand) and FreeAgent (based in the UK) have each announced at least one acquisition. For the most part, these companies’ purchases have been done to expand beyond their core accounting focus. Wave, for example, recently announced the pickup of small stock analysis startup Vuru.

Xero has been particularly acquisitive, announcing four acquisitions since its founding in 2006. The company, publicly traded on the New Zealand Stock Exchange, has been doing deals to both complement its products and expand geographically. Its purchase of PayCycle in July 2011 helped the company enter the nearby Australian market. Through organic and inorganic growth, Xero has grown its revenue to about $16m in its 2012 fiscal year, which ended in March.

Beyond M&A, some companies have developed new products as an offshoot to their businesses. Ruby on Rails developer LessEverything, based in Fort Lauderdale, Florida, is now offering LessAccounting. And Toronto-based invoice vendor 2ndSite now offers FreshBooks.

Meanwhile, Outright Inc was recently acquired by Go Daddy Group. Though, if you ask LessEverything, it could have very well been its LessAccounting product. The company purported on its blog that Go Daddy approached it two years ago with interest in buying its LessAccounting product.

For more real-time information on tech M&A, follow us on Twitter @MAKnowledgebase.