It’s been about 18 months since our last acquisition, and I know some of you are wondering what’s been going on.
I want to give you an update on where we’ve been, what’s changed in how we think about deals, and where things stand right now.
Why the Pause Previously
Two reasons.
First, we got more disciplined. After our first dozen-plus acquisitions, we had a portfolio generating real revenue and real cash flow, but a holding company that wasn’t yet self-funding. Every new acquisition needs to close that gap, not just add revenue.
Since many of our deals have been funded with debt or preferred shares, we needed to make sure any new acquisition would add cashflow to the parent even after financing costs.
The risk of buying a business and seeing it decline is always real, so we tightened our standards and walked away from deals that didn’t clear the bar. We evaluated dozens of opportunities during this period. Some made it to advanced stages but fell apart in diligence or carried operational risk we weren’t comfortable with.
Second, structuring and funding deals was harder than it should have been. As a micro-cap that wasn’t yet profitable, we didn’t have the cash on hand to do traditional deals, and the capital markets environment for companies our size made raising acquisition capital difficult. That constrained what we could pursue, even when we found businesses we liked.
The SPV we raised in 2024 helped us fund 3 deals, and we will probably raise more capital through that vehicle in 2026, but in 2025 we wanted to focus on delivering returns to the existing investors.
Throughout 2025, we focused on reaching profitability without further acquisitions, and we did make meaningful progress to that end, but ultimately we concluded we need to continue acquiring in order to bridge the gap.
Back In Acquisition Mode
Both of those constraints are now easing. Between our current financing facility and the shift toward some stock-based deal structures (which I’ll get into below), we’re in a position to fund deals in ways that weren’t available to us over the past 18 months.
How You Should View Each Acquisition
Ever since we went public, each of the seven acquisitions we’ve made has closed the gap towards us being profitable. However, no single acquisition could be considered a Giant Leap, or “the one” that gets us there.
Instead, you should view each acquisition as One Small Step towards that goal. Sometimes an acquisition is even two steps forward, one step back, as is the nature of acquisitions.
Once we start announcing closed deals again, you can view each deal as “The company is making steps in the right direction” and not “This is the one we need”.
Nod your head in approval, and wait for the next one.
When we reach profitability, you’ll know it from our filings.
Where Things Stand
We have active conversations in our pipeline. I can’t share specifics, but our deal flow is in good shape. I never set a specific target for number of acquisitions we will make per year, but I’d say it could be as many as half a dozen in 2026.
The amount of EBITDA we acquire matters more than the quantity of businesses, and on that front what matters is that we see acquisitions this year bringing us to being cash generative.
The profile we’re targeting:
We’re still targeting businesses with meaningful free cash flow, the kind where a single acquisition could materially move our self-funding math. We’re not looking at small bolt-ons currently.
Two notable deals we’re in progress with would combine for $100K/mo in free cash flow.
Our goal is to close one or two acquisitions per quarter, starting as soon as possible.
Of course, don’t hold us to those numbers as acquisitions involve a lot of moving parts; due diligence, negotiations, lawyers, and sellers.
What matters is we have an active pipeline, numerous conversations, and we believe the means to fund those deals. The exact cadence is less important than the impact of these deals.
For those tracking our path to self-funding, the math hasn’t changed. Each accretive acquisition narrows the remaining gap between portfolio distributions and parent company expenses.
Something Has Changed in Our Deal Flow
Here’s where it gets interesting.
We’re increasingly having conversations with business owners who don’t just want to sell. They want to become shareholders. They’re specifically seeking out Onfolio because we’re public.
Think about why that makes sense from the seller’s perspective. If you’ve built a profitable small business and you sell to a search fund or a PE firm, you get a check. The IRS takes its cut. You’re done. If the business thrives under new ownership, you don’t participate in that upside.
With a Nasdaq-listed acquirer, the math changes. The seller can receive stock in a publicly traded holding company instead of (or alongside) cash. Depending on how the deal is structured, they may be able to defer capital gains taxes until they actually sell the shares. And if the holding company grows, their shares appreciate. They didn’t just exit a company. They swapped a concentrated, illiquid asset for a diversified one with ongoing upside.
No private buyer can offer that combination. Search funds can’t. PE firms can’t. Independent sponsors can’t. It’s a structural advantage that only exists because we’re public, and it only exists at our deal size because larger public acquirers aren’t looking at these businesses.
The result: we’re not just competing on price anymore. We’re competing on deal structure. In a market where most buyers show up with the same offer (cash, SBA loan, maybe a seller note) that’s a real differentiator.
What’s Next
We’re heads down on the pipeline. When we have news to share, we’ll share it.
If you’re a current shareholder: the work is happening. The pause was deliberate, the filter is real, and we’re executing.
If you’re a business owner considering an exit and what you’ve read here resonates, reach out. We’re at onfolio.com/contact.
Disclaimer: This post contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “expect,” “believe,” “anticipate,” “plan,” “confident,” and similar expressions identify forward-looking statements. These statements involve risks and uncertainties, and actual results may differ materially. For a discussion of risk factors, see our most recent annual report on Form 10-K filed with the SEC. We undertake no obligation to update these statements. For authoritative financial information, please refer to our SEC filings at sec.gov.