Machinio, a startup with designs on being the Google of heavy equipment, has been acquired.
Liquidity Services, a company that operates a network of e-commerce marketplaces in more than 500 product categories, says it has paid $20 million for Machinio. The purchase consists of $18 million in cash and another $2 million in restricted stock issued to Machinio’s executives.
Another $5 million could be paid to Machinio should the company reach certain financial targets in 2019.
We profiled Machinio in a piece last year examining the growing landscape of online equipment services. Machinio has offices in Chicago and Berlin and was started in 2013 by co-founders Dmitriy Rokhfeld and Dan Pinto.
Rokhfeld and Pinto built Machinio with the goal of giving heavy equipment buyers a vertical search engine akin to those in other industries like Indeed for jobs, or Kayak, Travelocity and a host of others for travel. Today, Machinio is now capable of aggregating millions of listings from thousands of different sources. The platform has gained quite a bit of attention from investors, including Ritchie Bros. Auctioneers, a minority investor.
According to the Liquidity Services announcement of the acquisition, Machinio currently lists more than 1.2 million assets for sale, valued at more than $25 billion. The site attracts 10 million annual visits from users across 190 countries.
Beyond listing equipment for sale, a major focus for Machinio has become how it works with equipment dealers. In fact, though Machinio’s end users are prospective equipment buyers, the company’s primary clients are dealers.
“We work with tens of thousands of used machinery dealers and the major auction platforms,” Rokhfeld told me in our 2017 interview. “Our most basic value proposition is more exposure to buyers. A buyer comes to our site and they fill out their full contact information and we send that via email to a dealer. We’re not trying to be an intermediary, we’re trying to connect the two parties and step aside.”
“Long term, we want Machinio to be a true partner to dealers. All of our leads are vetted and only quality leads are passed along. We remove up to 20 percent of the leads on our system and we track that metric monthly. Last month we generated over 50,000 leads.”
Rokhfeld said the Machinio platform has a wealth of data beyond leads to offer dealers that can be a valuable asset in managing inventory and marketing spend.
To date, Machinio has signed more than 2,200 dealers to annual recurring subscriptions to a data set that Liquidity Services says “enables them to more efficiently sell their inventory to a broad base of interested buyers.”
BigRentz, an online equipment rental platform that arranges quick rentals by working with a network of rental houses across the U.S., provides similar data to its rental suppliers and is exploring a subscription that would open up more powerful data.
“This acquisition supports our strategy as the world’s largest marketplace for business surplus by expanding the services and channels we offer our sellers to maximize recovery and growing our network of buyers in important global equipment verticals,” Bill Angrick, Chairman of the Board and CEO of Liquidity Services, says in a statement. “Machinio is delivering superior value to their customers and our combined offering will enable us to grow our transaction volume, expand our recurring revenue service offerings, and utilize technology and innovation to improve our seller and buyer experience.”