For data scientists conducting due diligence for deal sourcing teams, gaining a comprehensive view of a company's performance relative to its industry peers is incredibly challenging. This task is further complicated when evaluating businesses with a physical presence or those providing services to brick-and-mortar establishments. In these scenarios, up-to-date and accurate location data is crucial. However, obtaining this data can be difficult, as open source data often lacks precision, and web-crawling methods can be time consuming and unreliable if not done properly.
In this blog, we'll explore why using point of interest (POI) data is essential for accurate market analysis and illustrate how it was effectively leveraged by a private equity firm to assess a potential acquisition.
Before diving into our specific use of SafeGraph Places data, it's important to contextualize why POI data is invaluable for investment research and due diligence.
By leveraging accurate and up-to-date POI data, businesses can minimize risks and create educated hypotheses about a store’s potential for success.
In collaboration with a prominent private equity firm who was looking to acquire a coffee shop chain, SafeGraph provided Places data to perform an in-depth market map analysis of the quick-service restaurant (QSR) chains, Starbucks and Dunkin’ in Broward County, Florida. This data allowed the firm to assess total addressable market (TAM), evaluate market performance by chain, identify submarket gaps, understand opportunities for chain expansion, and cannibalization.
Using SafeGraph Places data, the firm mapped out all Dunkin' and Starbucks locations within Broward County, Florida in Esri ArcGIS. They found that both chains had a significant presence, with multiple outlets scattered throughout the county.
They analyzed the accessibility of these locations by considering factors such as ease of entry, parking availability, and proximity to major roads and commercial centers. Their findings indicated that both Starbucks and Dunkin’ generally had good accessibility due to their positioning near high traffic areas and shopping centers. However, this also suggests that future expansion could be more challenging due to higher barriers to entry in these prime locations.
By leveraging SafeGraph Places data, we provided the private equity firm with high quality data to generate actionable insights:
By tapping into the granular and accurate data provided by SafeGraph Places, coupled with the powerful visualization capabilities of Esri, we offered the private equity firm a more holistic market picture for their market analysis. This approach not only supported strategic decision making for new investments but also enhanced the firm’s confidence in selecting an acquisition that was more likely to succeed.
