The last few weeks have seen ample M&A activity in the local commerce and SMB Saas sectors. Congruent with the broader investment landscape, deals continue to follow a combination of fundamental drivers and Covid-era realities and demand signals (think: eCommerce, digital media).

So to break down the latest market moves, we invited investors to the Localogy table. And because there are too many deals to tackle in one discussion, we chose a few standouts: iHeart’s Voxnest acquisition and Clearlake’s Endurance acquisition. We also discussed new eCommerce figures and what they mean.

Joining us to break down these dynamics were Chris Legg, senior managing director at Progress Partners, and Michael Yang, Managing Partner of Omers Ventures. Both have lots of perspective and experience in tech-sector investing and M&A activity. So we teed them up to do their thing.

See the full interview embedded below, along with our narrative takeaways.

iHeart acquires Voxnest

iHeart recently acquired Voxnest to buttress its podcasting ambitions. As we wrote recently, Voxnest provides automated ad insertion and optimization for podcast advertising. This is iHeart’s latest play as it leans into the continued growth that’s happening in podcast listenership.

But despite this growth, one key missing piece of the overall podcasting opportunity is monetization. There are gaps when it comes to ad targeting and analytics, largely due to Apple’s privacy-heavy stance and its historical dominance over podcast listener channels.

But other channels are emerging such as Spotify and iHeart’s growing list of properties. So this acquisition essentially helps iHeart better monetize all that inventory through a programmatic approach. It’s all about bringing to podcasting the ad tech we’ve come to know on the web.

Clearlake acquires Endurance International

Our second topic is the $3 billion acquisition of Endurance International Group by private equity firm Clearlake. For those unfamiliar, Endurance is an SMB services powerhouse with online presence and marketing brands like Constant Contact and BlueHost.

The deal itself is somewhat typical of private equity investments in that there are disparate assets — in this case a family of brands — that have room for optimization or finding further synergies. Endurance has already done this through service bundles like Constant Contact.

One issue is that web hosting — Endurance’s legacy business — continues to lose value as a sector as it becomes commoditized. However, it still has value within a broader bundle because it can be the entry-point to deeper SMB relationships. And it has high switching costs.

So having a broader bundle to upsell SMBs into is the name of the game for web hosts these days. Endurance has already been on that path, given eMail marketing and other functions. But the thought is that Clearlake can maximize value through further roll-ups or other means.

eCommerce Numbers are In

Our final topic is less about a specific deal but more about the inflection of eCommerce, and how that’s informing investing strategies. Companies like Shopify continue to accelerate product road maps and amplify distribution to meet the moment. And others are pivoting into eCommerce.

eMarketer projects 35 percent year over year growth in eCommerce transaction volume, while spending is up to 14 percent of retail revenue after hovering around 10 percent for years. Looking forward, the firm projects record highs in this year’s “cyber 5,” which lasts from Thanksgiving to Cyber Monday.

Add it all up and there’s lots of investor interest in eCommerce. Beyond selling things online, the opportunity is broader and has far-reaching effects. That includes transactional functionality for mobile ordering and offline fulfillment, a la order-ahead QSR, or curbside pickup.

Logistics are also being reimagined, such as turning shopping centers into delivery hubs. And there’s a continued move towards customer lifetime value and recurring revenue. This can involve subscriptions and introducing adjacent products to existing customer relationships.

How Much Will eCommerce Grow in FY 2020?

We dive deep on these topics in the roundtable, which you can see in full below.

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