Australian Search Funders

searcher profile

June 23, 2025

by a searcher from University of Oxford in Reading, UK

Hi Funders I am considering a return to Australia and wanted to know if there are any Australian-based searchers here and if they would not mind sharing a few thoughts on the market and their approach. I had hoped for a USA move but my wife needs to take exams to work there so the Australian market could be an option for us. regards Peter
2
20
237
Replies
20
commentor profile
Reply by a searcher
from University of Strathclyde in Melbourne VIC, Australia
I did a linkedin post on this recently Peter. Have copied it below: Here are some practical observations on what ETA looks like in Australia compared to the US, and how I’ve been approaching it: 1. Access to debt In the US, SBA loans (government backed) make small business acquisitions more accessible with low equity requirements and long-term debt. Australia doesn’t have anything equivalent. Financing is harder to come by unless there’s property involved as security. Not surprising given how much of our economy revolves around real estate. 2. Deal sourcing is less structured and seller awareness is low There’s no established network of ETA-focused brokers here. Most listings are on generalist platforms, and many owners have never heard of ETA. Cold outreach can feel unfamiliar, and sellers or brokers may be sceptical of non-industry buyers. Warm introductions, genuine curiosity, and presenting as a long-term operator makes a real difference. 3. Search funds are still in their infancy In the US, search funds are supported by experienced investors, academic research, and alumni networks. In Australia, the concept is just emerging. There’s less playbook and capital, but more room to shape your own path and less competition. 4. Smaller valuations and deal sizes Because funding is limited, most ETA-style deals in Australia are smaller. Multiples are usually two to three times EBITDA, often based on seller earnings. Many deals are under two million dollars, often under one. Most are owner operated, so buyers should expect to be hands-on. 5. Less valuation expansion upside In the US, operators often grow EBITDA and exit at higher multiples to PE. In Australia, multiples tend to stay flat. So returns come from buying well, improving operations, and generating consistent cashflow. It’s less about structuring and more about execution. 6. Real opportunity Australia has many solid businesses with loyal customers and steady cashflow that haven’t invested in systems, management, or digital tools. ETA is still relatively unknown, so there’s less buyer competition. The combination of smaller deal sizes, limited financing, and a less developed ecosystem creates real barriers—but also real opportunity. If you’re proactive, hands-on, and focused on running a good business, there’s real value to be found.
commentor profile
Reply by a searcher
from University of Melbourne in Sydney NSW, Australia
Khoa summarised the market very well. I might add that an acquisition's debt capacity will also be considerably dependent on the earnings and cash flow profile of the business, not just the asset base. We have been dealing with some debt brokers who are confident that on high free cash businesses with a solid chunk (~50%) of repeat revenue, we will be able to get###-###-#### turns of debt in there. So if you can buy something at 3x then you can still achieve >50% gearing (sadly though it isn't close to the 90% geared deals you see in the US with the SBA). I would also add that the fundamental difference in Australia compared to the US is simply scale. Given that we are >10% of the population size as the US, and that a significant majority of our population resides in 5 cities, it makes it extremely difficult to target only a couple of industries. An industry in the US might have 50 businesses in each state, whereas in Australia there might only be 5 in each major city. Something to keep in mind if you're considering starting narrow. And finally, I'm not too sure about everyone else currently searching in Australia, but things are moving rather slowly for us at the moment. Hopefully this will begin to pick up after FY25 financial reports are finalised.
commentor profile
+18 more replies.
Join the discussion