Product Announcement: The First AI Recommendation Engine for the M&A Industry

Flippa announces an AI powered recommender tool for matching buyers and businesses.

In recent years, the rapid growth of startups and mainstream adoption of digital business coupled with the large influx of acquisition entrepreneurs, funds and family offices has significantly and positively impacted the M&A universe. Despite increased deal making across the board the workflow and industry approach to deal making has been slow to adapt. Flippa has led industry change and this latest announcement – an AI powered recommender tool for matching buyers and businesses continues our innovative approach.

In the last two years, we’ve added market insights and deal benchmarking, a deal room, data integrations from 15 leading platforms, an off-market search offering and the addition of key services like due diligence and acquisition financing. This latest offering further streamlines deal making leading to more matches and deal efficiency. 

AI Can Lead to Greater Efficiency in the Initial Matching Process

In this dynamic and fast-paced environment, traditional methods of relying on professional networks and CRM’s are no longer sufficient. Business owners want greater efficiency in the process and the buy-side expects deal flow on tap. As a result, the role of new technologies, particularly Artificial Intelligence (AI), has become increasingly important in revolutionizing the way deals are done, particularly as it relates to the search for targets in a business acquisition or exit strategy.

In the M&A ecosystem, the foundation of success has historically relied on two key elements: a robust relationship network, and manually crafted company databases. 

The role of brokers and advisors in M&A was to use their networks to create opportunities and bring together the right people for potential deals. But how can they ensure the best match and ensure an exhaustive search, particularly as the universe of buyers continues to grow exponentially?

Last year, nearly 300,000 new buyers entered the Flippa ecosystem. To effectively analyze and understand this world, access to up-to-date mandates, intent and the processing of vast amounts of information is essential. This is where AI comes into play and what we have built here at Flippa; a tool that helps business owners, M&A advisors and brokers.

Building a Scalable Recommendation System

At Flippa, using cutting edge machine-learning, we have developed a system that matches our buyers with quality listings picked specifically for them by leveraging the latent (or hidden) intent of their actions and behaviour which informs their preference.

The AI relies on Graph Neural Networks (GNNs) to provide recommendations by allowing for multiple inputs. By identifying all the inputs (users, listings, search terms, etc) and connecting them via edges (viewed, watched, searched-for, acquired), a graph can be constructed which outlines the highly dimensional journey of a user.

This is a visual representation of how similar online businesses are to each other based on how prospective buyers interact with them.

After a significant amount of training, the model has begun to understand the intricate connections and interdependencies hidden within the seemingly endless network of edges and vertices – allowing us to surface recommendations to our users at an accuracy and scale not previously thought possible.

The solution is an effective scalable recommender engine where buyers will be matched algorithmically giving business owners, advisors and brokers a network of buyers at their fingertips. Just hit ‘Invite’ and the target acquirer will be notified of a relevant deal, expertly matched by the Flippa platform.

This is an example of a Flippa Deal Room showing buyers who have been algorithmically recommended for a particular business by Flippa’s recommendation engine.

For more information, read the post here from our lead data scientist, or check out the product announcement here.

This Effectively Answers the Question: “Who is Likely to Buy My Online Business?”

The power of AI lies in its ability to predict future behavior based on a set of examples. By creating a learning model through algorithms, AI can analyze new data and make predictions about future acquisitions and investments. The Flippa platform now provides a unique and comprehensive matching database on startups and SMEs from around the world. 

To book a demo and see how this matching tool may work for your business simply send an enquiry with details of your business or mandate to [email protected].

I would love to hear your thoughts on the Recommender Engine, flick me a note at [email protected]

    Tony is the Head of Product at Flippa and has a passion for enabling organisations to innovate and disrupt the market. He's led growth and scale up strategies in Product and Revenue across the startup, SME and Corporate sectors. At Flippa, Tony is driving an expert team to build new features and products that give users the tools they need to get deals done.

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