Constellation's Vertical Acquisition Strategy
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A story about how Constellation Software grew by acquiring hundreds of niche vertical software companies.
"Constellation has acquired over 500 businesses since being founded. They make offers to hundreds, if not thousands, of companies every year. To give an example, Jonas is one of their 6 groups. Jonas does hospitality, clubs and resorts, spas and fitness, construction, payments, moving and storage. You click on Jonas Software and it says 'we're a family of vertical market software companies' and they own 140 companies just under the Jonas umbrella, in 40 different markets.
They look for vertical SaaS companies - like a golf club booking management system that golf clubs use for tee times, club rentals and memberships. What makes it perfect is that software like this isn't going to have Microsoft, Facebook or Google competing in that market. The market is so fragmented that as companies start to get momentum and reach $1-3 million in annual revenue, Constellation just buys them. Then they own all the golf club software systems. They do this same thing for dentists, industrial rentals, and other vertical markets."
Shaan Puri
Host of MFM
Shaan Puri is the Chairman and Co-Founder of The Milk Road. He previously worked at Twitch as a Senior Director of Product, Mobile Gaming, and Emerging Markets. He also attended Duke University.