By Sanford Bragg December 22, 2021
Frenetic M&A activity during 2021 heralds major changes in the expert network industry as the largest firm plans to go public, as will the fifth largest expert network. Over $344 million was raised from private equity firms, most of it in the second half of the year as industry revenues surged. There were three acquisitions in the space, including the audacious purchase of the sixth largest expert network by a Japanese firm less than one-third its size.
M&A activity became white-hot in the second half of 2021, after the industry was jolted by Tokyo-based VisasQ’s August purchase of Coleman Research, a leading US expert network over 3x its size. Not long after, Capvision Partners, the largest Chinese expert network and fifth largest globally, filed for a Hong Kong IPO, followed two months later by industry leader GLG’s US IPO filing. 94% of the year’s $344 million of private equity funding closed after August, led by Atheneum’s $150 million raise.
Among the up-and-coming expert networks, Tegus was most active, closing a $90 million Series B and acquiring a software platform for its fast-growing library of expert transcripts. NewtonX, proSapient, and techspert.io, all of which promote their use of AI technology, also completed raises during the year. Inex One, an expert network aggregator, raised money. Recent startups Office Hours, Expertwired and Sealed Network completed seed rounds.
London-based expert network proSapient closed a $10 million Series A round led by London-based Smedvig Capital as it began promoting an aggregation platform which allows users to manage interactions with multiple expert networks.
San Francisco-based Office Hours, a 2020 startup offering DIY access to experts, announced a $5 million angel raise.
London-based Arbolus closed a $6 million Series A round led by UK venture firm Fuel Ventures and Plug and Play Ventures, a Silicon Valley venture firm. The firm said proceeds would be used to expand its US operations.
Amsterdam-based Expertwired, a 2020 startup based on AI technology, received about €1 million from an angel raise.
Tokyo-based expert network VisasQ, which listed on the TSE Mothers exchange in 2020, shocked the industry by acquiring US-based expert network Coleman Research, three times its size. VisasQ purchased Coleman Research for $102 million which represented a modest valuation of 2.3x Coleman’s 2020 revenues of $43.8 million.
Shanghai-based Capvision Partners, the fifth largest expert network globally, filed preliminary documents for an IPO on the Hong Kong stock exchange rumored to aspire to a $300 million raise.
Berlin-based expert network Atheneum Partners closed a $150 million funding round led by Guidepost Growth Equity.
Hong Kong-based expert network Lynk received a $5 million investment from UBS as an add-on to Lynk’s $24 million Series B financing. Lynk said it would expand its US operations.
Cambridge UK startup techspert.io, an expert network which uses artificial intelligence to source experts, closed a £8.8 million ($12 million) investment round to expand its coverage beyond the healthcare sector.
Stockholm-based Inex One, a marketplace for expert networks, closed a $3 million venture round led by J12 Ventures, a Swedish venture capital firm. The funding was to be used expand the firm’s presence in the US.
Gerson Lehrman Group, the largest expert network and industry pioneer, filed with US regulators for an IPO initially listed at $100 million.
Two similar acquisitions were announced within days of each other. Chicago-based expert network Tegus, an early pioneer in the growing trend of stockpiling transcriptions of expert interviews, announced the purchase of BamSEC, a search tool focused on SEC filings and earnings transcripts. A few days later, AlphaSense, a leading search engine focused on SEC filings and earnings transcripts which had just completed an $180 million capital raise, announced the purchase of a startup offering transcriptions of expert interviews, Stream by Mosaic.
Soon after announcing its merger with BamSEC, Tegus closed a $90 million Series B raise.
Singapore based Sealed Network raised an undisclosed sum in a pre-series A funding, led by Quest Ventures.
New York-based NewtonX closed a $32 million Series B round led by Australian venture firm Marbruck Investments.
Washington DC-based GlobalWonks rebranded as Enquire AI after raising $5.5 million in a Series A funding round led by previous investor Uzabase.
Over a decade has passed since rogue expert network Primary Global caused reputational damage to the industry, even though the compliance practices of leading expert networks were exonerated. GLG’s pending IPO will be a milestone marking the final dispersion of the cloud hanging over the industry since the insider trading scandals.
The key factor behind the industry’s M&A frenzy is torrid growth, as the industry flourishes in the wake of Covid-19. Virtual business practices have become the new normal, boosting demand for phone and video consultations with experts. Aggregate revenues for the industry accelerated in 2021, up 21% over the previous year, according to our recently released 2021 Expert Network Market Sizing. Expert networks are expanding aggressively, fueled by ample private equity investment – and soon by public equity investments. The maturation of the industry has begun.
- Leading Chinese Expert Network Files IPO (21)
- Expert Network Aggregator Inex One Raises $3 million (21)
- Why Isn’t Leading Expert Network GLG More Profitable? (21)
- Will an IPO Cure Leading Expert Network GLG’s Ills? (21)
- Expert Network Lynk Adds $5 Million Investment From UBS (18)
- Market Leading Expert Network Gerson Lehrman Files For IPO (18)
- Expert Network NewtonX Raises $32 Million (18)