A recent article on Crunchbase highlights that big M & A deals don't always involve the most talked-about industries or companies. Last week, software investor Hg announced a $3 billion acquisition of auditing platform provider AuditBoard. According to Crunchbase data, this is the largest purchase of a U.S. private, venture-backed company in 2024, during a slow period for big M&A transactions.

AuditBoard might not be a familiar name, but it has an impressive track record. Based in Cerritos, California, the company is profitable with over $200 million in annual revenue. Despite this, it wasn't a major player in venture fundraising, raising only $43.6 million in total over a decade, with its last round led by Battery Ventures in 2018.

AuditBoard's low profile is partly because it operates in the auditing and compliance software sector, which isn't known for producing household names.

Venture capitalists have shown interest in financial compliance and auditing startups. This interest aligns with a rise in funding for accounting-focused companies, many of which have raised significant rounds this year.

Some notable, recently funded auditing and compliance companies include:

- DataSnipper: Based in Amsterdam, provides productivity tools for auditing and finance. Raised $100 million in a Series B led by Index Ventures in February.

- Supervizor: With offices in New York and Paris, markets a quality assurance platform for finance teams. Announced a $22 million funding round led by Orange Ventures.

- FloQast: Based in Sherman Oaks, California, co-founded by former auditor Mike Whitmire. The 11-year-old company sells accounting and compliance workflow automation tools and has raised over $300 million, including a $100 million Series E led by Iconiq Growth in April.

- Kintsugi AI: San Francisco-based startup helping businesses simplify tax compliance with AI-powered automation. Raised $6 million in a Series A led by Link Ventures.

In light of AuditBoard's $3 billion exit, it's also worth noting the year's second-largest venture-backed M&A deal. OpenGov, a provider of software to streamline government operations, was sold to existing stakeholder Cox Enterprises at a $1.8 billion valuation.

Both AuditBoard and OpenGov operate in industries—auditing and govtech—that aren't typically exciting but offer essential services. These companies provide tools to complete mundane and complex tasks more efficiently, making them attractive to acquirers.

Public and private equity investors recognize the value in such software. Intuit, a leader in tax and accounting software, is currently valued at around $170 billion, trading near its all-time high. Similarly, tax compliance software provider Avalara, a venture-backed company, sold to Vista Equity Partners for $8.4 billion in 2022 after a successful IPO a few years earlier.

While these companies and industries might not generate buzz, they are certainly making significant impacts in the M&A landscape.

Source: crunchbase.com