How Bidzi seeks to streamline mergers and acquisitions for SMEs

Akshay Dosaj became an entrepreneur in 2015 and managed six restaurant brands across 19 locations throughout the UAE. Having scaled and exited multiple businesses of his own, he was well aware of the challenges at every step during a merger and acquisition transaction – finding professional help for marketing materials and financial projections, sourcing the right buyers, and accessing affordable legal services. Additionally, securing an escrow agent – a third party who holds assets or a sum of money in safekeeping until completion of a contract – was nearly impossible, he recalls. Mr Dosaj shared these struggles with his friend Asif Rashid, who had spent a decade at Microsoft specialising in productivity and cloud computing . Together, they envisioned automating and simplifying the mergers and acquisitions (M&A) process into a seamless, singular solution. They conceptualised Bidzi, a UAE-based digital platform that seeks to streamline that process amid the rapid growth of small and medium enterprises . “With up to 700,000 SMEs in the UAE and an average lifespan of 8.5 years, there are numerous businesses that are either shut down or change ownership every single year,” says Mr Rashid, co-founder and chief operating officer of Bidzi. “These businesses require a range of high-quality corporate and M&A services at affordable prices – both of which are currently elusive due to the prevailing fragmented nature of these services and the high cost of expert advisers. “For example, hiring a broker, a lawyer, an escrow agent and an M&A adviser can quickly raise the costs of selling one’s business, and the business owner may look at dropping essential services like legal support and escrow to finish the transaction. Bidzi addresses these challenges by simplifying and speeding up the business-selling process in the UAE.” Bidzi, which went live in May, offers a curated marketplace of vetted businesses and connects sellers with qualified buyers. The platform simplifies the traditionally complex sale and acquisition process by consolidating all essential services, such as business valuation, production of high-quality marketing materials, buyer matching, due diligence, legal support and escrow, into a single platform. “This is unlike the traditional approach that requires clients to engage multiple specialists including M&A advisers, brokers, lawyers and escrow agents,” says Mr Rashid. “This comprehensive approach simplifies transactions, making it easier for SMEs to navigate the complex M&A process.” About 94 per cent of all companies operating in the UAE are SMEs, employing more than 86 per cent of the private sector labour force, data from the Ministry of Economy shows . The Emirates aims to increase the number of SMEs operating in the country to one million by the end of 2030 as it seeks to boost their contribution to the economy. SMEs contribute 63.5 per cent to the country’s non-oil gross domestic product, Minister of Economy Abdulla bin Touq said last year. Mergers and acquisitions activity in the Middle East and North Africa region surged to $86 billion in 2023, recording a 4 per cent increase from the previous year. In contrast, global M&A activity decreased by 15 per cent during the same period, according to research by consultancy EY this year. The GCC region was pivotal in Mena’s deal-making activity last year, accounting for most of the deals with 565, valued at $83.2 billion. The UAE and Saudi Arabia accounted for 305 deals valued at $24.8 billion. Bidzi’s focus is on SMEs with an enterprise value ranging from Dh1 million ($272,294) up to Dh100 million, the co-founders say. Mr Rashid says a common mistake owners make when selling their businesses is failing to seek expert help. Engaging experienced professionals who can manage the entire exit process allows owners to focus on running their business, ensuring the sale proceeds efficiently, he explains. They also have unrealistic expectations about the business's value. “We frequently see unprofitable businesses asking for inflated valuations, creating a significant gap between buyer interest and the asking price … finally, underutilising escrow services. Using escrow can provide ease in the minds of both parties during the licence and fund transfer process.” Mr Dosaj, who is chief executive of Bidzi, recommends that business owners plan for a sale timeline of three months to a year, depending on the complexity of their business, data readiness and industry specifics. The first step is to get the data ready for an information memorandum that outlines the business highlights, key financials, investment thesis, industry outlook, future projections and additional insights such as intellectual property registration and the presence of any debt, he explains. “While selling a business typically involves 37 steps, the key ones focus on engaging and negotiating with a broker or M&A adviser, a law firm, an escrow agent, and a public relations officer,” says Mr Dosaj, who started his career in 2005 as a corporate lawyer at Norton Rose Fulbright (UK). Once rates are agreed, each stakeholder plays a distinct role in the sale process. The broker or M&A adviser gathers the detailed company data to create the information memorandum that presents the business attractively to prospective buyers. The lawyer handles crucial documents such as the non-disclosure agreement, letter of intent, and the share sale and purchase agreement or the asset purchase agreement, and negotiates terms with prospective buyers, Mr Dosaj says. The escrow agent manages the escrow agreement and fund disbursement when the deal is closed, while the public relations officer facilitates the licence transfer to the new owner, he adds. With security measures, including anonymous listings and Know Your Customer verification, Bidzi seeks to safeguard buyers and sellers. “Anyone can register as a buyer on Bidzi, but a KYC verification is run on each user before they are able to access the plethora of tools on the portal,” says Mr Dosaj. “Business owners wishing to sell are carefully vetted to ensure that only genuine and quality businesses are listed for the public.” Bidzi charges the seller a flat fee of 5 per cent of the transaction value, payable upon completion of the sale. The platform also offers marketing materials and business intelligence to support informed decision-making, addressing the critical need for verified information in the mergers and acquisitions process. Bidzi provides legal support for document creation, negotiation and finalisation. “Our mission is to make the M&A process accessible and efficient for SMEs,” Mr Dosaj says. “Bidzi’s platform removes the complexities and barriers traditionally associated with M&A transactions, providing a transparent, secure and seamless experience that empowers businesses to make informed decisions.” The company currently operates in the UAE, with most of the opportunities originating from Dubai and Abu Dhabi, the co-founders say. Plans include expansion into the wider GCC region, as well as India and Pakistan. The start-up's clients range from serial entrepreneurs and high-net-worth individuals establishing their base in the UAE to established business owners seeking exits, they add. “We are currently working with clients across various sectors, including FinTech, retail, trading, electronics, manufacturing, health and wellness, and hospitality,” Mr Rashid says. Bidzi is registered with Dubai’s Department of Economic Development and has an office in Emaar Square, Downtown Dubai. There is a team of nine employees and consultants working on UAE transactions. The company is bootstrapped with personal funds from the co-founders. “Like many pioneering start-ups, Bidzi faces challenges in market education and building trust with clients unfamiliar with M&A processes,” Mr Dosaj says. “However, our commitment to simplicity and privacy, along with our expertise and experiences, has allowed our value proposition to resonate with entrepreneurs on both sides of the spectrum.” What already successful start-up do you wish you had started? Akshay: OpenAI Asif: Telegram What is your next big dream to make happen? Akshay: Over the next 18 months, we plan to expand Bidzi beyond the UAE into key markets across the GCC, including Saudi Arabia, Kuwait and Qatar. Asif: Orchestrate the successful sale of an array of businesses with a combined enterprise value of Dh500 million. We estimate that the average business’s asking price will range between Dh5 million to Dh10 million. Based on this, targeting the sale of 100 businesses, each valued at the lower end of Dh5 million, will allow us to achieve the Dh500 million goal. What new skills have you learnt in the process of launching your start-up? Akshay: I have always wanted to launch a tech start-up and working with Asif has provided great insight into what it truly takes. Asif: I have learnt a great deal from Akshay on how to review legal documents, identify key clauses to watch out for, and recognise issues that can arise from poorly drafted transaction documents. If you could start all over again, what would you do differently? Akshay: I would have started earlier and launched Bidzi at least five years ago. Asif: I would have started earlier as well. Who is your role model? Akshay: I draw inspiration from Sheikh Mohammed bin Rashid, Vice President, Prime Minister and Ruler of Dubai, whose visionary leadership and fearless pursuit of ambitious goals deeply resonate with my own aspirations for Bidzi. Asif: I find [Nike co-founder] Phil Knight’s life story truly impressive and inspirational. From his humble beginnings, he trod uncharted waters, took on significant risks, and overcame setback after setback through relentless resourcefulness, ultimately building a brand recognised by billions worldwide.

How Bidzi seeks to streamline mergers and acquisitions for SMEs

Generation Start-up: Digital platform offers a curated marketplace of vetted businesses and connects sellers with qualified buyers