Mergers & Acquisitions

What makes a PropTech business attractive to an acquirer, how should founders prepare for an exit, and what does the M&A process really involve?

For the fourth and final session of our Lunch & Learn series, we brought together perspectives from across the industry to explore these questions. The session featured Ben Lerner, Managing Director & Founder at Lerner Associates, Alex Kountourides & Rob Davis, Co-Founders at Valos and Terrie- Lynne Devonish, Chief Legal Officer and Corporate Secretary at Altus Group.

From understanding the current PropTech M&A landscape to preparing a business for sale and navigating life after an acquisition, the discussion offered practical insights for founders considering their next stage of growth.

Key Takeaways

1. Buyer interest is growing, but due diligence is becoming more rigorous

Ben highlighted an increase in buyer interest across the PropTech M&A market, particularly from strategic and industry buyers. However, this doesn't necessarily mean deals are progressing more quickly. Buyers are taking more time to assess opportunities, carrying out greater due diligence before making offers and assessing businesses more closely.

For founders, this means being prepared to demonstrate the strength of their business beyond the initial pitch.

2. Build a strong, sustainable business - not just one designed for an exit

A recurring theme was the importance of building solid business fundamentals. Buyers are looking for more than rapid growth; they want to see strong customer retention, diversified revenue, sustainable financial performance and products that customers continue to rely on.

Ben also highlighted the importance of reducing customer concentration and demonstrating consistent growth over time. A business with healthy foundations is more likely to stand out to potential acquirers.

3. AI matters, but it doesn't automatically increase your valuation

AI is becoming increasingly part of how buyers assess technology businesses, but simply incorporating AI into a product does not necessarily translate into a higher valuation.

Ben explained that buyers are looking at how effectively businesses use AI both within their product offering and across their internal operations. They are also considering how defensible a business is as AI develops, including whether it has proprietary data, hardware or services that are harder to replicate.

The message for founders is to demonstrate how AI strengthens the business, rather than treating it as a valuation shortcut.

4. Start preparing well before you plan to sell

One of the strongest messages from the session was not to wait until an exit is on the horizon to get your business ready.

Ben recommended starting preparations 12-24 months in advance where possible, giving founders time to address weaknesses, improve performance and make changes that could increase business value.

This includes maintaining clean and consistent financial information, documenting processes, reviewing customer contracts and ensuring the business can demonstrate its performance clearly.

5. Transparency and preparation can make or break due diligence

From the buyer's perspective, Terrie explained that due diligence is about identifying material risks, including regulatory, legal and technology-related issues.

No business is expected to be perfect, but being open about what is working well and where improvements are needed can help build trust and keep the process moving. Incomplete information or unexpected issues can lead to delays, changes to deal terms or, in some cases, a buyer walking away.

Having the right legal and M&A advisers involved early can also help founders navigate the process more effectively.

6. The right acquisition is about strategic fit, not just the deal

The Valos story demonstrated that an acquisition can create opportunities beyond the immediate transaction.

For Alex and Rob, joining Altus Group offered a route to expand Valos's platform into new geographies and access a wider global client base, without taking on the same level of risk and capital requirements independently.

The discussion also highlighted the importance of integration. Terry emphasised the need to plan ahead while involving the acquired team in decisions, preserving the culture and qualities that made the business attractive in the first place.

Advice for Founders: What Would the Panellists Recommend?

To close the session, each panellist shared one key piece of advice for founders considering a future investment or acquisition.

Ben Lerner- Prepare early.

Keep your business, financial information and data in good shape, and start thinking about an exit or growth raise well in advance. 

Rob - Get everything out of your head and onto paper.

Document how your business operates, keep information organised and make sure co-founders and senior leaders are aligned on the company's goals, future direction and culture.

Terrie - Invest in good advisers.

Think ahead and make an investment in experienced legal and M&A advisers. They can help identify the key considerations for a transaction and make the process run more smoothly.

Alex - Build a real business and relationships early.

Focus on building a genuine business with a product that delivers value. If an exit is something you're considering, identify potential buyers early and build relationships before a transaction is on the table. Having an established level of trust can make the process much easier.

Watch the full Lunch & Learn recording above and explore Ben's presentation slides below for further insights into the PropTech M&A market and preparing your business for its next stage.