Social Chain, the advertising agency founded by Dragons’ Den star Steven Bartlett, is to be sold in a deal worth around £7.7m.
Bartlett, who helms the popular Diary of a CEO podcast, founded the company in 2014 but has since moved on. The agency works with clients like TikTok, Amazon, KFC and Apple Beats to create social media advertising campaigns and perform influencer marketing services.
The Manchester-founded influencer marketing agency went public in Germany via a merger with homewares retailer Lumaland in 2019.
Last week, rival social and digital media company Brave Bison acquired the entire issued share capital of Social Chain Limited for an initial consideration of £7.7m and potential future payments of £9.5m.
Social Chain had been a subsidiary of listed German e-commerce operation The Social Chain AG.
Value comes under scrutiny
Bartlett stepped down as chief of Social Chain in 2020 and it is not known whether he retained a stake in the company and would therefore financially benefit from the sale.
In January, Bartlett launched a $100m (£81m) investment fund targeting startups in the space, biotech, blockchain, and health tech industries.
The value of the sale has sparked scrutiny over the value of the agency, which led to Bartlett submitting a Twitter thread, clarifying that the sale was for the Manchester agency only, not the entire Social Chain AG group.
In a statement on Twitter, Bartlett clarified the position of the company, which he is no longer involved with: “A year or so after I departed Social Chain AG decided to focus on e-commerce and began selling off its marketing agencies around the world. Social Chain owned almost 10 agencies and they represented about 70m of our total revenue in the year I stepped down. They're nearly all sold.”
“This week they sold the original agency business we had started in Manchester almost 10 years ago for 8m to Brave Bison – a very capable marketing company with great founders. I'm very happy the brand is now in the hands of people with marketing in their DNA.”
Last week I was informed that Social Chain AG - was selling off part of the original agency business that I started in 2014.— Steven Bartlett (@StevenBartlett) February 5, 2023
I've had so many questions about what this means, what's being sold and where this leaves Social Chain AG, so I wanted to clarify.
“Huge momentum for growth”
Oliver Green, Brave Bison chairman, said: “We’ve long admired Social Chain, which we believe is among the world’s best-regarded social media and influencer marketing brands, and we’re excited by the highly relevant clients it brings into our business.
“Social Chain has huge potential for growth within Brave Bison, taking the momentum Pete [Metcalfe, Social Chain CEO] and the team have built up using Steven Bartlett’s platform.”
@SocialChain are joining the Brave Bison universe.— Brave Bison (@BraveBisonIO) February 3, 2023
We're thrilled to welcome 120+ like-minded people to the herd, bringing more mastery of embracing client complexity to drive sustainable growth… pic.twitter.com/0ZEA5677Id
Brave Bison said the acquisition fee for the company could rise to more than $20m (£16.3m) depending on the performance of the business over the next three years.
Metcalfe added: “Joining with Brave Bison is a great move for us. This will only help to enhance our plans to grow the Social Chain proposition and build on our continued success.”
“We are excited to work closely with like-minded people that align with our culture. It not only gives us the opportunity to build combined services for clients.”
The company has 122 employees with offices in Manchester, New York and London.
Under the deal, Brave Bison and Social Chain will merge, with Metcalfe taking responsibility for the enlarged social media advertising practice. The deal is expected to increase Brave Bison’s revenues from social media advertising sevenfold to £15m.