BizEquity, a Wayne-based fintech startup that offers online business valuation services, has landed its first top 10 U.S. bank client.
TD Bank (NYSE: TD) of Cherry Hill said it has signed a contract to offer the valuation tool free of charge to its small and midsize business clientele across its Maine to Florida footprint.
Terms of the deal were not disclosed but BizEquity Founder and CEO Michael Carter said TD pays an annual fee to BizEquity for the right to provide the product to its customers free of charge.
The tool provides fair market, enterprise and liquidation values calculated in real time — Carter says as soon as 10 minutes — and based on current market factors. BizEquity will deliver detailed reports with valuation information and key industry performance indicators to TD Bank relationship managers, who then share it with the business owner.
Chris Giamo, head of TD’s commercial bank, said in an interview that with the economy booming, there is fierce competition that requires banks to differentiate themselves.
“Most entrepreneurs and family-owned businesses don’t have access to this type of service,” Giamo said. “So this can be a big help with things like tax planning, strategic and succession planning and analyzing funding and acquisition opportunities.”
Giamo said TD has about 500,000 business customers with annual revenues of $500 million or less in annual revenue that would be a sweet spot for BizEquity.
Carter formed BizEquity in 2010 and the company recently has begun to break even as the business strategy has been more focused on achieving 100 percent annual revenue growth. The company is investing in development, engineering and customer acquisition.
“I don’t want to slow down the growth,” Carter said. “It took seven years for SalesForce to become profitable. We’ll get there.”
Carter demurred when asked about annual revenue numbers but did say it is “somewhere in the mid-seven figures.”
BizEquity now has offices in London, Singapore and New Delhi, India. It uses financial service companies large and small, including locals such as Brinker Capital, Envestnet, Univest, MassMutual and Penn Mutual, to distribute the product.
Last September, BizEquity announced that it had joined with The Wall Street Journal and Dow Jones on the launch of a new valuation tool called ‘the WSJ Pro Business Valuator’ aimed at WSJ customers who are private equity investors, merger and acquisition advisers and entrepreneurs.
But the relationship with TD is important because it is the first major bank to contract to use the service. Carter pointed out that the deal with TD is not exclusive and could lead to more big banks becoming clients.
“Like I said, any chance you have to differentiate yourself from the competition is important,” Giamo said. “So the fact that we are the first to offer this gives us an advantage, even if others begin to offer it as well.”
Carter said three members of BizEquity’s advisory board had relationships at TD, which then vetted the product with some of its small business customers before agreeing to a contract.
Moving forward, Carter said BizEquity is working on an enhanced product that not only provides valuation but also suggests how to optimize the business moving forward.
Safeguard Scientifics founder Pete Musser has served as Carter’s mentor and BizEquity has co-headquarters at the Musser Group’s offices on Devon Park Drive in Wayne as well as 123 South Broad Street in Center City. Carter expects to move into new offices on the same Wayne campus within a year or so to accommodate planned growth.
TD Bank is a subsidiary of Toronto-based TD Bank Group. It is the second-largest bank based in the Philadelphia region by deposits.