Merian Chrysalis invests in You & Mr Jones – the “Target” investment referred to in Merian’s announcement on 28 September 2020 is You & Mr Jones LLC. The company has finalised its due diligence on You & Mr Jones and committed to invest US$60m as part of a US$260m funding round.
You & Mr Jones was founded by David Jones and Jean-Marc Antoni who were formerly the CEO and CFO of Havas & Havas Worldwide, one of the largest marketing and communications groups globally. The company, which identifies itself as the world’s first “Brandtech™” group, has raised over US$500 million to date and has acquired and integrated what it believes to be best-in-class digital and mobile technology service providers which enable brands to execute their marketing strategies “better, faster, and cheaper”.
The largest company within the You & Mr Jones group is Oliver. Oliver is the pioneer and global leader in building in-house digital marketing capabilities for brands. Oliver has developed a technology platform that enables marketers to plan, create and disseminate digital campaigns seamlessly. Given the rapidly changing face of digital marketing, this operating system offers a significant productivity boost to clients and has enabled some to make material cost savings.
You & Mr Jones is headquartered in New York (US), employs approximately 3,000 people across 40 countries and has made seven acquisitions and 20 strategic investments to date. Current clients include Unilever, Adidas, Microsoft, Danone, Diageo, Reebok, Reckitt Benckiser, PayPal and Google.
Investment Thesis
The investment adviser believes that few sectors are as ripe for disruption as the marketing and communications sector. In the adviser’s view, the future of marketing will rely on the expert curation of multiple service providers, combined with next-generation marketing intelligence. It further believes that data, content and media will need to be connected and optimised in real-time via a central technology platform and AI. In addition, the continued fragmentation of media and the broadening diversity of audiences is likely to lead to an unprecedented level of complexity for brand owners.
By building a collaborative model from the outset, the adviser believes You & Mr Jones has designed an operating model for the future, where multiple service providers can be utilised at ease through a core technology platform, creating a marketplace of expertise through a single point of contact.
Investment Rationale
You & Mr Jones:
(1) operates in a very large market and controls only a small market share:
Total global media spend totals US$640 billion per annum and over US$260 billion of that spend is now allocated to digital channels (source: Zenith Optimedia, 2019). Digital channel growth continues apace with other marketing channels in structural decline. Many traditional marketing agencies appear unable to transition their business models to adapt to the demands of customers that are seeking digitally coherent services and infrastructure. Companies are looking for a partner who can deliver scalable solutions that allow them to deliver the volume of content they now need, at the speed they need it at, at an affordable cost.
(2) provides technology and solutions that are significantly disrupting incumbents:
You & Mr Jones leverages technology, in-housing and people-powered marketing to enable marketers to realise material cost savings. These savings can either be taken to the bottom line or reinvested in additional marketing campaigns.
(3) has displayed significant growth over many years and given barriers to entry, has the potential to continue to do so:
You & Mr Jones generated a +27% rate of organic net revenue growth during the first half of the year (source: Mobilemarketer.com) which the Investment Adviser believes to be best-in-class. This is particularly impressive given the already material revenue base and the impact of COVID-19.
(4) has the ability to drive economies of scale through its operating model:
As brands transition from analogue to digital, You & Mr Jones is likely to have the opportunity to create and curate an increasing level of digital content which will drive operational efficiencies. As part of this process, technology can be harnessed to automate the production of digital assets.
The business has also developed a proprietary technology platform that enhances the productivity and functionality of various business units including clients, digital asset production, pricing and distribution.
(5) has a strong and well-respected management team
David Jones (CEO) and Jean-Marc Antoni (CFO) have an exceptional track record and a strong reputation. They know the industry extremely well given their senior roles at Havas, one of the world’s largest media conglomerates. They have assembled an extremely talented group of senior partners in the company.
Funding
Completion of the investment will take place in due course and it is the company’s current intention to use the proceeds of the proposed placing of equity, announced on 28 September 2020, to fund the investment in You & Mr Jones. There has been a positive response so far to the placing from both new and existing investors.
MERI : Merian Chrysalis invests in You & Mr Jones