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Digital due diligence

Today, an assessment of a potential target’s online performance and capabilities is a pivotal part of almost every commercial due diligence process. This is not just the case for pure online players, but also for traditional businesses with any type of online activities.

A proper Digital Due Diligence is a very different beast from a regular commercial DD: traditional KPIs do not apply, online markets behave differently, and teams require very different capabilities. To perform a proper DDD, different tools and a deep understanding of digital products are required.

BLOOM supports companies by executing digital due diligence of pure online players and the online activities of other players. By combining experience in top-tier strategy consultancy, data analysis, online entrepreneurship, and M&A, the BLOOM team is well equipped to support clients by assessing the digital performance of a potential target.

Feel free to reach out to info@bloomamsterdam.com for more information or download our digital due diligence whitepaper.

A digital due diligence is very different from – and complementary to – a ‘traditional’ commercial DD

‘Traditional’ commercial DD Digital DD
Market & trends
  • Often focuses on national markets
  • Looks at relatively stable and predictable markets
  • Requires a more international perspective
  • Highly volatile markets – requires up to date knowledge of players and potential disruptors
Competitive landscape
  • Relatively high barriers to entry
  • Looks at value chain dynamics
  • Many players come and go
  • Traditional value chain dynamics don’t always apply
Product & value proposition
  • Mainly focuses on market segmentation and performance in terms of financials/market shares and consumer research
  • Additionally looks at technical scalability, retention, UX, programming languages, network effects (direct & indirect)
Financial assessment
  • Focuses on EBITDA, revenues, COGS, etc.
  • Additionally focuses on traffic, conversion, CLV, CAC, etc.
Team
  • Mainly focuses on leadership
  • Focuses on leadership, product, marketing, and the technical team
  • Way of working in the team: adoption level of agile and continuous improvement