Programmatic advertising, data warehousing, the metaverse and emerging digital media in the sights of the new investment fund
Sir Martin Sorrell’s S4Capital enterprise is kicking off a US$150 million fund to invest in early-stage tech players with their sights on the marketing and advertising industries.
S4Capital has partnered up with Stanhope Capital Group to launch the new venture capital fund, dubbed S4S Ventures. Five key areas of technology innovation are in their sights: Martech, adtech, data technology, creative technology and emerging digital media and content.
Within these, there’s a particular emphasis on companies looking to deliver solutions for accelerating programmatic advertising across connected TV, gaming and digital audio ecosystems; data warehousing and analysis tools for identity resolution; content development and workflow management; monetisation tools for the metaverse; and emerging digital media that drives Generation Z engagement.
The new fund is looking to raise up to US$150m from investors and said while it will look globally, a big focus is on the US, Europe and the Middle East.
S4S will be led by Sanja Partalo, former global head of strategic development and partnerships at Sorrell’s former agency group, WPP. General partner, Daniel Pinto, along with Sorrell will also sit on its investment committee.
Sorrell said S4S’s aim is to be “a very engaged and creative equity owner”. “The fund will provide investee companies with more than capital – offering differentiated value through the advantage afforded by the S4 network and our specialist knowledge with geographical, client and talent inputs,” he said.
“We are in a strong position to help portfolio companies validate ideas, launch products, accelerate growth with clients and partners and help engineer strategic partnerships, investments and exits.”
In a statement, the companies noted investment and public offerings in the advertising and marketing technology industry as digitisation further accelerates. Global digital ad spend in 2021 totalled US$491.7bn, a 29.1 per cent year-on-year increase, according to eMarketer.
During the same year, martech, adtech and creative automation sectors also growth, with 18 companies completing public listings in the US. Luma also reported 214 per cent growth in martech M&A activity year-on-year in its Q2 2021 report, buoyed by deals such as Salesforce’s US$27.7 billion acquisition of Slack, Twilio’s purchase of ZipWhip for $3.2bn, Intuit’s $12bn purchase of MailChimp, Adobe's Frame.io deal and more.
There were also a number of significant investment injections announced over the past year, including a US$1.2 billion investment into Sitecore, US$230m into Yotpo and US$320m into Klaviyo.
“We are entering ‘Web 3.0’ – the next stage of digital evolution. It is an incredibly fertile environment for startups which are focused on transforming the marketing and advertising sector through new technologies,” Partalo commented. “Regulatory, demographic and technological catalysts – such as a stricter privacy and regulatory environment for the tech giants, the rise of Gen Z, the democratisation of AI infrastructure, and the dawn of the Metaverse – mean that this segment of the venture market benefits from significant tailwinds, presenting an exciting opportunity for investors.”
S4Capital was established by Sorrell in 2018 with the support of Stanhope Capital Group and focuses on digital advertising and marketing services. It promptly merged with production company, MediaMonks, and listed on the London Stock Exchange later that year. In A/NZ, MediaMonks merged with BizTech in June 2019, and it’s also globally merged with the likes of ConversionWorks, Firewood, IMA, White Balance and MightyHive since then.
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