The US-based Boats Group (described as the global marine industry’s largest search engine) was this month acquired by private equity firm General Atlantic and the Canada Pension Fund Investment Board. The company is believed to have an enterprise value of almost $2bn, at least double the $850mn price paid four years ago by Permira private equity. The buyers are believed to be paying $1.3-1.5bn (an estimated 10x revenue) for majority control, with Permira retaining “a significant minority” shareholding.
The latest valuation reflects the fact that revenue may have almost doubled in the past four years through investment in digital platforms, bolt-on acquisitions and AI matching tools which have enabled the company to earn commission on the $6.5bn in value of boats sold on the sites, including Boat Trader, YachtWorld and Boats. Com, and European platforms such as iNautia and Botentekoop.
Boats Group (formerly boats. com) was an early internet startup in San Francisco in 1999. The following year, it acquired Yachtworld, before opening a European base in the UK and websites in Germany, France, Spain, Italy and the Netherlands. In 2010, Yachtworld and Boat Trader merged to form what then became Dominion Marine Media. In 2016, it was acquired by Apax for a reported $200mn. The London-based pe firm had a strong track record in turbocharging digital transformation, notably with AutoTrader whose IPO gave it a 4x return in seven years.
Apax recognised the similarities of the two classified markets, even though used boats (unlike used cars) are mostly sold through intermediaries rather than directo to consumers. As with AutoTrader previously, Apax pushed Boats Group to invest in platforms and technology. That was a path which has led to a business now worth almost $2bn.
The Miami-based company now employs some 300 people and operates several of the world’s larger digital marketplaces which attract over 200mn annual visits (65mn uniques) and support more than 200k listings in140 countries, “giving sellers unmatched exposure to serious boat buyers”.
It has led tech innovation in its market, upgrading what had traditionally been a fragmented, offline marketplace (classified ads). It has increasingly integrated AI-driven merchandising, reporting and workflow capabilities to improve engagement. AI tools assist with photo enhancement and reorder image galleries based on click data, and build optimized listings. Algorithms sort and personalize listings for buyers based on preferences and behaviour, and help to verify potential buyers.
CEO Patrick Kolek (ex Ebay and Naspers) has said the latest investment in Boats Group validates its long-term strategy to modernize the marine marketplace and build a more connected, data-driven experience for buyers and sellers: “Boats Group has evolved beyond a simple listing platform. Over the past two years, we’ve developed more comprehensive solutions to connect sellers with millions of serious buyers.”
Making the point that the success is due to more than merely lead gen and sales commission, Kolek has said: “Data clearly shows buyers don’t make impulsive decisions—they invest significant time in research on Boats Group platforms, where we help turn those interested buyers into real sales.”
Part of that message is that Boats Group captivates eventual buyers with a whole range of content, not just the boats for sale that are the clear focus of the business model.
The CEO has accelerated the tech transformation in the two years since his appointment, with the objective of eliminating friction in a complicated buying process that, he says, combines “the emotion of buying a supercar and the complexity of buying a house.”
And there’s still plenty of room to grow.
The pre-owned boat market has been growing rapidly, now comprising 67% of Boats Group purchases. Then there’s the rental market. Click&Boat connects boat owners with would-be renters the way that Airbnb does for home renters. That too is a growth market in the US and across the world.
Boats Group re-tells the familiar of how digital transformation compounds valuations for such marketplace businesses – and AI offers even more. But the wider lesson may be that – for all the vital emphasis on transactional data and the detail of boats, funding and operations – the broader, often non-exclusive news and content is vital to creating an all-conquering, one-stop marketplace and building longterm relationships with people who might one day become buyers or sellers.
