The entrepreneurial dream often culminates in a successful exit—a moment when a larger company acquires your startup, validating years of hard work and strategic planning. But building a business with acquisition as a potential endgame isn’t about luck; it’s about making deliberate choices from day one. Few understand this better than Jem Walters, the founder behind the innovative fintech app Snoop.
Snoop, a money-saving app that leverages Open Banking, was successfully acquired by the digital bank Vanquis in 2023. This strategic move highlights the value of building a business that not only serves its customers but also fits perfectly into a larger company’s growth plans. Based on the journey of Snoop and the principles of successful tech exits, here are five proven tips for founders aiming to build a startup that gets acquired.
1. Solve a Real, Commercially Viable Problem
The most attractive acquisition targets are those that have identified and effectively solved a genuine customer pain point. A great idea is not enough; it must address a need that a large market is willing to pay to solve. Acquirers are not just buying technology; they are buying a solution to a problem they also want to solve for their customer base.
Snoop excelled here by tackling consumer inertia in financial services. Many people overpay for everything from mobile phone contracts to household insurance out of “loyalty” or a lack of time to find better deals. Snoop automated this process, providing data-driven, personalized suggestions to help users save money effortlessly. In a world grappling with a rising cost of living, this solution wasn’t just convenient—it was essential. This clear value proposition makes for a compelling acquisition narrative.
2. Build a Scalable, Data-Driven Engine
Potential acquirers look for scalability. They want to see a business model and a technology infrastructure that can grow exponentially without a proportional increase in operational costs. A startup built on a scalable platform is not just a company; it’s an asset that can be plugged into a larger ecosystem to drive massive growth.
Snoop was built on the UK’s Open Banking framework, a highly scalable and secure system for sharing financial data. This architectural choice was fundamental. It allowed the app to connect with numerous banks and provide its services to a broad user base from the outset. Furthermore, its use of data analytics to generate insights was the core “engine” of its value. For its acquirer, Vanquis, this represented a ready-made, sophisticated data-analytics capability that would have taken years and significant investment to build from scratch.
3. Obsess Over the Customer Experience and Build a Loyal Base
A loyal and engaged user base is one of a startup’s most valuable assets. An acquirer is often looking for a shortcut to market penetration and customer loyalty. A product that users love, trust, and use regularly is far more valuable than one with high user churn, even if the top-line user numbers seem impressive.
The Snoop team, which included experienced executives from Virgin Money, understood the importance of brand trust and user experience in financial services. They designed an app that was not only powerful but also intuitive and user-friendly. This focus on customer experience leads to several key benefits:
- High Engagement: Users who regularly interact with the app are more likely to become long-term customers.
- Positive Word-of-Mouth: A great experience turns users into brand advocates, driving organic growth and reducing customer acquisition costs.
- Rich Data Insights: An engaged user base generates more data, which can be used to further refine the product and personalize the experience.
4. Understand the Strategic Landscape from Day One
Building for acquisition requires strategic foresight. You need to understand the market you operate in, identify potential acquirers, and be aware of their strategic objectives. Why would a company like a major bank, a tech giant, or an industry incumbent want to buy your startup? Answering this question is crucial.
The acquisition of Snoop by Vanquis’s parent company, Provident Financial, is a textbook example of a strategic fit. As reported by sources like Tech.eu, Vanquis aimed to enhance its digital product offering and provide more value to its customers. Snoop provided the perfect solution: a proven, data-driven platform to help customers manage their finances better. Jem Walters and his team likely knew that established financial institutions were grappling with the “build vs. buy” dilemma for fintech innovation. By creating a best-in-class solution, they made the “buy” decision an easy one for a strategic partner like Vanquis.
5. Assemble a Team with Corporate and Exit Experience
The team is just as important as the product. A founding team with a track record of success and experience in the corporate world provides immense confidence to potential acquirers. People who have worked within large organizations understand the complexities of integration, the importance of robust financial reporting, and the rigors of the due diligence process.
Jem Walters and his co-founders’ background at Virgin Money was a significant asset. They had firsthand experience in a large, regulated financial services environment. This experience signals to an acquirer that the startup is likely built on solid foundations, with clean governance and a professional operational structure. An experienced team knows how to prepare a “data room”—a comprehensive collection of documents that an acquirer reviews during due diligence—and can navigate the complex negotiations of an M&A transaction. This level of professionalism can significantly de-risk the acquisition process for the buyer and lead to a smoother, more successful exit.
Building a Legacy
Ultimately, building a startup that gets acquired is not about taking shortcuts. It’s about building a fundamentally strong business that delivers real value. By focusing on solving a tangible problem, creating a scalable engine, delighting customers, understanding the strategic landscape, and building an experienced team, you create a company that is valuable in its own right—and an irresistible target for a strategic acquirer. The journey of Snoop is a powerful blueprint for founders who want to build not just a product, but a legacy.
