Enhancing market presence and growth: Baker Tilly's strategic market and customer diligence for a niche shipping software provider

Client need

A lower-middle market private equity firm had entered exclusivity on the potential acquisition of a niche in-cart shipping software provider. The target enabled online retailers to present accurate, rules-based shipping options during checkout, integrating with platforms such as leading storefront providers and custom e-commerce stacks. 

The sponsor engaged Baker Tilly to conduct market and customer diligence to evaluate the company’s defensibility and growth prospects.  

Baker Tilly solutions

Our approach blended interviews, surveys, competitor analysis and modeling to capture a well rounded view of the market and customer landscape. Key activities included: 

• Interviews with the target’s leadership to clarify hypotheses, align on priorities and structure data requests, including ASP and segmentation data 
• A multi-tiered Voice of Customer effort including: 
• 11 in-depth customer interviews 
• 80 structured surveys (10–15 minutes) 
• 147 rapid-response surveys (<5 minutes) 
• Voice of Partner interviews with leading e-commerce platforms to explore adoption patterns, value drivers and under penetration by merchant segment 
• Expert interviews to confirm insights from proprietary databases and pressure-test whether AI disruption would be significant in the short to medium term 
• Competitor demos to assess usability, rules engine configuration and edge case handling 
• A bottom-up market sizing model that segmented opportunity by platform, revenue band and solution type (vended versus in-house) 

Results

Leveraging extensive subject matter experience in B2B software and platform dynamics, Baker Tilly delivered clear, actionable answers to the client’s core diligence questions.  

Key takeaways included: 

• Market size and growth: The market was large and expanding at a pace that supported continued investment 
• Platform whitespace: Clear opportunities existed on major platforms, especially among more complex merchant profiles 
• Competitive advantage: The target’s rules engine handled real-world complexity (e.g., multi-warehouse fulfillment, restricted goods) while maintaining a clean checkout experience 
• Customer decision drivers: Buyers emphasized cost estimation and compliance, but often overlooked experiential features 
• Voice of Partner interviews revealed that UX elements, like button design and checkout configuration, directly influenced cart abandonment and order value 
• Revenue durability and disruption risk: Recurring revenue showed strong retention, and most clients viewed generative AI as complementary, not a substitute, for the logic-intensive aspects of the product.
  
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