From 16 Years in Corporate to a $1m SDE Acquisition

And I think because of the size and scale that this business has reached, it's hard for a brand not want not to want to go with us because they can centralize all their needs with us all their repair needs with us um so that's also another sort of compelling aspect of the business as we continue to grow and um become more and more of that dominant player i think we'll

as long as we continue the quality and the servicing, we'll be able to take on more of the market share. I think honestly, I give a lot of respect to the founder, the seller of this business. He found a niche demand in the market and kind of created this industry, this little small niche industry.

Yeah, I agree. And I think it's so funny that there's a lot of sort of moments where things are just connecting. I started a clothing line many, many moons ago. And now I'm in this garment and clothing kind of business. Yeah.

Are you an outdoorsman, Jesus? Of course, Vancouver is an outdoorsy place.

Yeah, it's hard not to be if you're in Vancouver. Yes, very much so. Hikes and camping and just being outdoors is part of our lifestyle.

Yeah, sure. And one thing that I envision on this deal, it would be customer concentration. So there's only so many of these big brands. Maybe not. Maybe I'm underestimating just how many brands, high-end brands there are.

But if I had to guess, there's probably 10 to 20 big ones that offer these really generous warranties and that are seen at REI and wherever. obviously, means that the number of customers that you have is small and you might have concentration 10%, 20% with just Patagonia, for example. Was that an issue with the business?

Yeah, so there was that being the biggest red flag, I think, in my initial review of the business. The client concentration is quite severe. The top, say... five brands take up almost 80% of our revenue.

And the TAM is, you know, total addressable market of the industry could actually maybe have already been reached to a certain degree because the brands that we're targeting typically are ones that offer this great warranty, are very, keen to have sustainability in their ethos and are willing to offer it because their products are at a certain price point. It just doesn't make sense to spend a…

money to repair something when the product itself wasn't at the right level. So it does mean that there's a ceiling at some point. And I recognize that.

That was one thing that I kind of came to terms. But also not knowing exactly, you know, when you're doing due diligence, you're doing really just scratching the surface. And so as much as I could envision some growth, bringing more brands, you know, we have some of the largest ones, which I think create a halo effect for other future brands.