An inside look at WPP Ventures: Opportunity favours the prepared

WPP Ventures is the global venture capital unit of WPP Group, the world’s largest advertising and media company. Bedecarre notes that while WPP Ventures is a small and somewhat informal operation, it’s easily accessible. He invites entrepreneurs to reach out to him directly via his WPP Ventures email, which he provides at the closing of our conversation.

In addition to his role at WPP Ventures, Bedecarre is a co-founder and chairman of digital agency network AKQA.

Why was WPP Ventures created?

WPP Ventures is a channel for WPP to make investments globally in companies that we think are doing something interesting and have the potential to support our clients and our group as a whole.

What we do for our clients and as a group changes year upon year. And our clients are very hungry for things that are new. Naturally, we want to be ‘first in’ with our clients and be able to say, “hey, look, here’s a new data platform,” or “here is a new social media platform that’s really interesting.” Ultimately we want to become smarter about what is happening and Ventures helps us do that.

What is the role of WPP Ventures in terms of WPP’s strategy for growth?

I don’t think Sir Martin Sorrell would say that it’s core to our strategy. It’s a small part of what we do. It’s important though and we can see making more investments in the future.

WPP buys 50 or more companies each year outright. We have a very active M&A model which is critical to support our growth strategy. I think Sir Martin would say that data, technology, expanding in emerging markets—these are the kinds of things that will drive overall WPP businesses.

WPP Ventures is about supporting the currency of technology savvy innovation, bringing additional value to clients. I don't think venture investments are considered a fundamental driver of earnings growth.

What value have WPP Venture portfolio companies brought to WPP’s clients?

There are many examples of happy WPP clients who are using WPP Ventures portfolio companies. For example, Vice Media, a global youth-media company, is one of our recent investments. We helped them broker a deal to help Unilever launch a dedicated channel for women. This is a really good example of where we invested in a company that was doing something interesting and were able to connect them to one of our most important clients. We were able to say to Unilever, “here is a platform where you can have a high-value conversation with women,” and that’s creating added value.

What are some of WPP Ventures’ most successful investments?

Buddy Media, a social enterprise software company, was a great success as an investment. When we invested in Buddy Media, there were probably 100 companies trying to create social platforms. I think their CEO Michael Lazerow would say that WPP helped them connect with clients—big clients—which allowed them to create case studies and examples of good work that [in turn] allowed them to stand out from the pack and grow incredibly fast. And this also helped them to have a very dramatic exit. [Note: Buddy Media was sold to Salesforce.com for about US$800 million in 2012].

Omniture, a site analytics platform, was a later stage investment. We were lucky financially. On the one hand we got lucky and had a great return. [Note: Omniture was sold to Adobe in 2012 for approximately US$1.8 billion]. We are currently investing again with Josh James, the founder of Omniture, and are working with him on his new venture Domo, a business management platform company.

Vice Media has just been an amazing investment all around.

How are portfolio companies integrated into the WPP Group as a whole?

It depends on the company. The goal is to get our portfolio companies into the WPP ecosystem. There are companies like Asymmetric, a portfolio company that focuses on data analytics. They might be introduced to Kantar, the data investment arm of WPP, and their client base. Other companies like Percolate, a marketing management platform, have platforms that GroupM is very interested in. Right now, we have some of our creative agencies interested in bringing Refinery 29, a fashion and style platform, where we recently made an investment, to their clients.

There is any number of different avenues to support companies that Ventures invests in once we have a relationship. It might be introducing them to clients directly, or it might be introducing them to one of our service groups.

How does WPP Ventures identify its investments?

WPP doesn't have a specific venture team, and our investments to date tend to be somewhat ad hoc. We rely on our key WPP officers to vet and approve investments. For example, Scott Spirit, our chief digital officer, is based in Singapore. Right now, I’m the guy in Silicon Valley, and so on.

As you might imagine, Sir Martin has a longtime relationship with a number of venture investors. WPP Ventures doesn’t have any single firm that we rely on to do diligence. We work more broadly than that.

We typically participate on B-round investments and usually don’t take a board seat.

We’re also always meeting startups that are too early for us to invest in now but we want to get to know them, introduce them to our clients, see if our clients get traction with them and then evaluate later if we’ll make investments.

What do WPP Venture investments tend to look like in terms of size and structure?

A typical investment will be from US$500,000 to US$5 million. I wasn't involved in this, but there was a huge investment made in a new sports marketing company called Bruin Sports Capital. Sir Martin led this effort personally and the deal came through his own relationships. I think this shows the flexibility we have to go big or go small depending on the case. We can move agilely and quickly.

What input do WPP Group companies have in influencing investments?

We have a very small corporate team that’s doing lots of stuff in addition to WPP Ventures. They are aware of what the key issues are because they are working with WPP’s portfolio companies on a daily basis. They are constantly having conversations about what the company needs and should do. There are not discussions going on about, “hey everyone, what should we be investing in?” We don't just dream stuff up.

How are WPP Venture portfolio companies influencing WPP as a group?

I wouldn't take credit for anything like that. We’re not changing the face of the earth or anything.

However, working closely with innovative startups has changed how we do our work. We have more of an urgency to get to prototype rather than sit around talking about Powerpoints. I think that’s something that would not have happened if we were not collaborating with all these great entrepreneurs.

How do entrepreneurs get in touch with WPP Ventures?

Unfortunately, we don’t yet have a mechanism for people to bring us proposals that we can vet on scale. It’s on our wish list but there isn’t yet an online mechanism to submit a business plan.
Big venture companies have like 25 partners and are very hard to get hold of. We have 180,000 employees around the world and there is always someone who knows how to find us. I’ve never met anyone who has said to me, “god, you guys are really hard to reach.”

Entrepreneurs can email me directly at [email protected].

Barry Lustig is managing partner of Cormorant Group, a market and talent strategy consultancy focusing on the Asia Pacific