Septeni sees Lion & Lion acquisition as key to Southeast Asia growth

TOKYO - Septeni Holdings, a Japanese digital conglomerate, is looking to make greater headway in Southeast Asia with the US$13.8 million acquisition of Lion & Lion, a Malaysian digital creative agency.

Both companies have more prominent competitors, but they have their own specific strengths. On the surface, they are also culturally distinct, but have qualities that those in charge believe will draw them together.

JASDAQ-listed Septeni was established in 1990 and specialises in social media marketing and smartphone apps. A rarity among Japanese digital marketing firms, it has 12 offices outside Japan, including in the US, UK, China and Vietnam, which account for 10 percent of its revenue.

Lion & Lion started out nearly four years ago in Kuala Lumpur as a venture by Nova Founders Capital, which also owns an online eyewear retailer, GlassesGroupGlobal. It has a presence in Hong Kong, Singapore and Jakarta and works with clients such as Coca-Cola, Apple, Google, Nestlé and L’Oréal.   

Lion & Lion managing partner Casper Andersen (co-founder with Hugh Batley) aims to make it the leading digital agency in Southeast Asia. Andersen describes Lion & Lion as a company that has “merged the consulting and agency models to align business and marketing objectives” and prides itself on providing “full transparency” in its activities with “no form of hidden incentives”.

While “leading” can be difficult to define, Septeni’s support opens up the potential to grow. In particular, Andersen notes “Septeni can bring scale to media buying” that Lion & Lion cannot do alone. It also offers expertise in platforms such as Line.

Casper Andersen, Hugh Batley

What’s in it for Septeni? Shintaro Karaki, corporate planning director, notes that by 2020, the Japanese market is expected to be worth 1.5 trillion yen (US$15 billion), but that Southeast Asia will be twice that size. It is therefore an opportunity that Septeni and its clients cannot afford to ignore.

Septeni has around 1000 clients; Karaki is unable to list specific brands but says he hopes to connect clients in the gaming and mobile app sectors to Southeast Asia. Without Lion & Lion, finding the right creative team for localised work proved difficult, he says. He says that moving into Indonesia is important for Septeni and indicates Lion & Lion will be key to opening up that market.

Karaki says Septeni has no plans to change Lion & Lion’s existing management structure but that he and Eunji Seo, who also works in the corporate planning division in Tokyo, plan to spend time in Malaysia to oversee the integration. He also aims to double Lion & Lion’s headcount of 175 over the next three years.

Of course, cultural and linguistic differences can prove problematic for Japanese companies in making acquisitions work. But Andersen says despite initial hesitation, he was relieved to find Septeni’s culture “quite like our own—young, informal and with an open environment”. He says the company also appears to emphasise the development and wellbeing of its staff.

Karaki says another key feature of Septeni is that it values cultural diversity. Around 270 of its 1,300 staff are non-Japanese. While not a huge number, it is significant for a Japanese company of that size with the bulk of its operations still concentrated in Japan.

“In Japan, when we talk about diversity, it’s often about promoting women,” Karaki says. “But in our company, it doesn’t only refer to gender equality, but equality among age, nationality, religion and [sexual orientation].” That attitude is important if a company is to become a successful global business, which he hopes to see more of from Japan, he says.