In the U.S. economy, small businesses play an indispensable role, employing nearly half of the workforce and contributing 44% of the GDP. However, when the owners of these economic pillars consider exiting, they often face limited options. OffDeal, a startup nurtured by Y Combinator's Winter 2024 incubator, is dedicated to addressing this issue through innovative AI technology.
OffDeal was co-founded by former investment banker Ori Eldarov and former Meta engineer Alston Lin, aiming to provide merger and acquisition services traditionally limited to large enterprises to millions of small businesses. The company's AI agents can identify potential acquisition targets, match suitable institutional buyers, and generate sales materials, thus automating investment banking tasks.
Image Source: The image was generated by AI, provided by the image licensing service provider Midjourney
Despite the core reliance on artificial intelligence, OffDeal adheres to a "human-centric" service philosophy. Eldarov emphasized in an interview with TechCrunch: "The most important transactions in our lives involve people." Customers interact directly with human advisors, while AI works behind the scenes to improve efficiency.
OffDeal's services empower both sides: helping small businesses find buyers and assisting buyers in discovering acquisition opportunities. The company has built a database of 2 million small businesses in the U.S., using AI agents for precise matching. Currently, OffDeal has signed contracts with 9 institutional buyers, with over 250 more on the waiting list.
To address potential "hallucination" issues with AI, OffDeal employs a strategy of AI-assisted human decision-making. Chief Technology Officer Lin stated that as underlying models (such as OpenAI's GPT-4) continue to improve, this issue is gradually being alleviated.
OffDeal recently completed a $4.7 million seed round led by AI-focused venture capital firm Radical Ventures. The company plans to use the funds to expand its advisory team and increase marketing efforts. OffDeal's service fees are comparable to traditional investment banks, ranging from 5% to 10% of the transaction value.
By applying AI technology to the M&A field, OffDeal is opening up a new exit route for small businesses, potentially bridging the gap between economic vitality and technological innovation.