Competition for deals in the realm of private equity continues to rise sharply. As investor demand soars and managers jostle for deals, new sources of information, such as web site traffic data, can provide an edge over their peers to help identify robust investment opportunities, improve due diligence processes and ultimately grow portfolio companies.
By Ed Laverey, Director of the Investors Solution – Competition for deals in the realm of private equity continues to rise sharply. As investor demand soars and managers jostle for deals, new sources of information, such as web site traffic data, can provide an edge over their peers to help identify robust investment opportunities, improve due diligence processes and ultimately grow portfolio companies.
Due diligence
By using web and app traffic data in conducting their due diligence, private equity managers can get a 360° view of company and sector health. This perspective is built using data from over 1 billion websites and more than four million apps.
“Since Similarweb collects data from such a breadth of websites and apps, managers can gain insights via a comprehensive view of a company and the industry in which it operates,” outlines Ed Lavery, Director of the Investors Solution.
This data can also be used to fill gaps where, historically, little to no data has been available. “Similarweb has international data, so for global companies that do not provide a granular regional breakdown, we can provide a country-by-country performance view,” Lavery says. Providing an example, he details: “Managers looking to launch a product or grow a business in a new market can examine the traffic there prior to launch. They can analyse, for example, the brand perception, and identify where the opportunities are ahead of making that move.”
Sourcing investment opportunity
The notion of using website traffic data to locate investment opportunities can be taken even further. Lavery notes: “Managers can use digital behaviour data to enrich their insight and find signals in any company they are tracking.”
Most PE managers have access to a number of data sources and this alternative dataset would provide them with a real time view of a company or sector. “Whereas they, historically, might have checked on a company once a year, now they can get a monthly view on how the company’s trajectory is progressing and find inflections in that performance,” Lavery highlights.
He observes how in using this data, some of the larger private equity firms are starting to operate in a similar way to quant funds; they are using high volume datasets to understand when is the right time to initiate a conversation and engage with a company to consider making a deal.
Supporting growth
Website traffic data is also highly valuable post-investment, to support PE managers in monitoring their portfolio companies and growing those businesses efficiently. “By leveraging this data, managers can improve a portfolio company’s marketing strategy, drive traffic to its website and grow its business,” Lavery explains.
Preeminent technology investors, Naspers, have exalted their use of Similarweb’s data and use it as a key part of their dealmaking. The venture capital group relies on Similarweb to identify emerging players around the world and benchmark them as part of its due diligence process. The data also enhances the performance of its portfolio clients with valuable market insights.
To learn more about Similarweb visit www.similarweb.com/corp/ investors/
Ed Lavery, Director of the Investors Solution
Ed heads SimilarWeb’s Global Investor Solutions business. Ed joined SimilarWeb four years ago and has been spearheading the solution to help investors integrate Digital Alternative Data into their investment research. He has also worked with many of the world’s leading brands, shaping their digital strategies through market intelligence data. Prior to SimilarWeb, Ed started his career in Investment Banking in London, working at Rothschild and DC Advisory.
