Transactions | Page 12 of 16

By NATHALIE TADENA

Jan. 29, 2016 8:00 a.m. ET

You & Mr Jones, the “brand technology” company founded by former Havas SA Chief Executive David Jones, is following through on its promise to start rolling up technology firms in the advertising world.

You & Mr Jones announced Friday that it has purchased a majority stake in data company fifty-five, as well as minority stakes in ad tech firm Beeswax and GIF platform Gfycat. Financial terms of the investments were not disclosed.

Mr. Jones, a 15-year-veteran of Havas, raised $350 million to launch his new company in June with the goal of helping brands better leverage technology in their marketing efforts.

“Technology allows you to do every single part of the marketing process better, faster and cheaper,” Mr. Jones said. “With any good technology company, data is a critical cornerstone.”

Fifty-five describes itself as a “data agency” that helps brands collect and analyze their data across media channels to boost the return on investment on their marketing dollars and ultimately improve customer acquisition and retention. The 150-person company was founded by former Google European executives and counts L’Oreal, Danone, AXAand Orange among its clients. In addition to its Paris headquarters, fifty-five has offices in London and Hong Kong. As part of the deal, fifty-five will open an office in New York, expanding its presence to North America.

You & Mr Jones also said it has also invested in New York-based company Beeswax and San Francisco-based company Gfycat. Beeswax’s technology stack allows brands to bring programmatic media buying in-house, a trend that has emerged as many marketers raise questions about the transparency of agencies’ digital ad buying practices and pricing. Gfycat, meanwhile, is a platform for sharing short, looped, soundless video GIFs, a format that more marketers are embracing.

You & Mr Jones has a two-pronged investment approach. Most of You & Mr Jones’ investment funds will be spent on majority acquisitions, while roughly 10% of the funds will be spent on minority investments in early-stage and high-growth tech companies, Mr. Jones said.

“We want to ensure our partners feel like they still have a very big share of the business,” he said. “We don’t want to buy 100% of a business. You tend to disincentivize the management team.”

With the fifty-five deal, Mr. Jones said his company is taking a stake that is just over 50%. Mr. Jones said he’d like to do seven to 10 deals similar to the fifty-five acquisition with his current round of funding. The aim is to add strategic value to entrepreneurial companies and help them scale, he said.

“At the moment, if you’re looking to raise money to expand and grow, you either can go private-equity and VC firms, in which case you get money but you don’t get any strategic added value,” Mr. Jones said. “Or you sell to a big company who swallows you up. You get the strategic side but you become a tiny dot in a large company.”

Mr. Jones too said there are more deals in the pipeline for his company, adding that “we have money at a time when valuations are coming down.”

You & Mr Jones is among several new players in the advertising industry seeking to challenge traditional ad holding companies by investing in a breadth of marketing services. Former WPP and Microsoft executive Mark Penn’s Stagwell Group, for example, recently acquired a majority stake in digital agency Code and Theory. Stagwell, which at its launch last year said it had financial flexibility for $750 million of deals, plans to make more acquisitions in the digital space.

You & Mr Jones focuses on investments in content creation; creative, brand and content strategy; social media marketing; programmatic media buying; multi-channel networks and measurement and analytics. At its launch, You & Mr Jones had already acquired a majority stake in creative crowd-sourcing company Mofilm and invested in visual marketing firm Pixlee and news site Mashable. In November, You & Mr Jones and Mofilm launched a “brand-centric” multi-channel network.

Link to full article: Wall Street Journal