Data-driven insights to invest with confidence—delivered in under 4 weeks

What We Did 

A private equity investor was preparing for an acquisition in the website subscriptions industry. The firm wanted to assess the target’s future, based on a combination of past performance and impacts of the pandemic, including current customer behavior. That’s where we came in.  

At West Monroe, we have completed many similar analytics projects for this private equity firm in the past. Its partners recognized our track record for value creation through data science – and the speed at which we can deliver sophisticated predictive analytics using our proprietary Intellio® Predict platform. In less than six weeks, we equipped the firm with the insight and confidence it needed to move forward with the deal, as well as ideas for future value creation.   

The Opportunity 

To confirm its investment, the firm wanted to answer key commercial questions about the target’s business, based on analysis of a very large data set. These questions included: 

• What are the trends of cohorts and retention by geography? 
• To what extent has the company converted free users into paying customers? 
• How effective is marketing? 
• How did the COVID-19 pandemic affect the business? 
• Who are the power users/users with very high engagement?
• Can early user engagement help predict churn for the newest cohorts that joined during the pandemic? 

An Undeniably Different Approach 

Our multidisciplinary team of private equity, software, and data science experts was ready to tackle this challenge – and deliver answers in the timeframe required for fast-moving transaction diligence. Leveraging our proprietary analytics platform, Intellio® Predict, we quickly ingested 9.2 billion rows and 250 gigabytes of data across 7 tables and then used advanced machine learning and established predictive models to address questions that otherwise would have been impossible to answer. We also benchmarked our findings against the company’s specific market, using our rich proprietary knowledge base that includes $160 billion in revenue data across $33 billion in closed deals. 

Returns You Can Measure 

Our work helped the investor understand the company’s growth potential as it finalized the deal. Based on our analysis and findings, the firm’s investment committee determined the business case was sufficient to move forward with the acquisition. The firm closed the deal, using our materials to gain the support of both the investment committee and its lenders.  

We also provided insight that can boost growth and create value during the holding period. This included data-driven suggestions for converting free customers to paid customers and optimizing marketing that the company would otherwise not have been able to surface. Implementing any of these ideas will further increase the company’s business value, which is critical to realizing the investment thesis.