Baton, led by a former Zillow executive, raises $10 million to help small businesses find buyers
Small and medium-sized businesses (SMBs) often struggle with options when owners are ready to retire. Baton emerges as a solution, providing a marketplace aimed at connecting SMBs with potential buyers. Recently, Baton announced a successful raise of $10 million in a Series A funding round, primarily led by Obvious Ventures. This addition takes Baton’s total funding to $15 million, with contributions from Burst Capital, FJ Labs, Fluent Ventures, and Zillow co-founder Spencer Rascoff, alongside prior investors like Divergent Capital, Bloomberg Beta, and Zeno Ventures.
The company plans to utilize this infusion of capital to expand its team and enhance marketing efforts. Baton’s CEO and co-founder, Chat Joglekar, revealed the New York-based startup, which currently employs 15 people, is aiming to double its workforce by the end of 2025. “We are excited at the opportunity to really reach so many more owners and buyers and support them in their journey,” Joglekar remarked.
Founded in December 2021, Baton addresses one of the most critical challenges for SMB owners: succession planning. Often, owners looking to retire face the dilemma of finding someone interested and capable of taking over their businesses. This situation can be especially daunting if family members are not interested in inheriting the business. In some instances, private equity firms may step in if the company is large enough, but more often, businesses resort to shutting down in the absence of viable options.
According to Joglekar, an ex-Zillow executive, this is a frequent scenario. Baton also anticipates benefiting from the impending “Silver Tsunami,” a term used to describe the wave of small businesses expected to transition ownership over the next five to ten years as baby boomers retire. “There will be a huge wave of SMBs going to transact,” Joglekar explained.
In this space, Baton’s primary competitor is BizBuySell, a well-established platform introduced in 1996 and known for aggregating business listings. BizBuySell, part of CoStar Group, features approximately 65,000 companies annually, as noted by Bob House, BizBuySell’s president.
Contrasting with Baton, BizBuySell does not provide advisory services for the businesses listed on its site. Instead, it assists brokers in sourcing new business listings, assessing their value, marketing them, and qualifying prospects. “We welcome competition, and we love innovation in the business brokerage space for sure,” House commented on Baton’s presence in the market.
Currently, Baton showcases about 564 businesses nationwide, with many hailing from the service sector, including industries like plumbing and HVAC, as Joglekar noted. To be listed on Baton’s platform, companies generally need a minimum valuation of $100,000.
