By using the Hybrid Growth Diligence approach, we helped assess the intrinsic value and confirm the resilience of the target’s business model by testing:
- Its ability to maintain a high-growth rate in a macro-economic context where inflation can reduce buyer’s consumption impulse in consumer discretionary;
- The dynamics of its existing customer base, pursuing cohort analysis, to understand customer loyalty according to whether they belong to historical or recent pool of consumers;
- The efficiency of its S&M spend on acquiring new customers, notably through analysis of LTV/CAC ratio calculation, as well as the rationale of the customer acquisition metrics forecasted in the business plan in countries where future expansion relies heavily on;
- Its hedging against the inflationary risk of raw material and transport costs, as well as its dependence on a limited number of key suppliers.
In validating the target’s ability to grow at scale
and its level of profitability
, we helped our client confirm its investment thesis.