WPP’s wholly owned global marketing communications agency JWT has acquired a majority stake in Mumbai-based Social Wavelength, a full-service social media agency, for an undisclosed amount. While the exact financials of the deal are not available, JWT has acquired 50-60 per cent stake in the agency, Social Wavelength's co-founder Hareesh Tibrewala told Techcircle.in.
JWT was in talks with the agency for the past six-seven months for the acquisition. Social Wavelength's revenues for the year ended March 31, 2013 were Rs 9.15 crore, with gross assets of Rs 5.92 crore.
Post acquisition, the agency will retain its name and continue to operate as a separate entity. The co-founders Tibrewala and Sanjay Mehta, who both continue to have stake in the company, will run it.
"Around seven months ago, one of the divisions of JWT approached us to do some work together for one of their client's projects, and they were very happy with the kind of ideation and support they saw from our team. This probably set things in motion," said Tibrewala. "JWT already has a large number of clients, and a lot of work needs to be done for these clients in the area of social and digital. Hence they were looking for an agency which had that kind of size and skill set," he added.
Back in 2011, Social Wavelength had raised an undisclosed amount in its second round of angel funding from four investors including Sunish Sharma, former managing director at private equity firm General Atlantic and managing partner & co-founder, Kedaara Capital Advisors LLP; Jayendra Shah, senior partner at accountancy firm NA Shah Associates; as well as a US-based high-net-worth individual and a fourth Indian investor.
Sharma, Shah and the US-based investor were repeat investors, and had also invested in the company in 2010. Post the acquisition, all the angel investors have exited the company. "While I cannot share the multiples of the exit or the amount invested, it has been a fabulous return for the investors," shared Tibrewala.
Founded in April 2009 by Mehta and Tibrewala, Social Wavelength began full-fledged operations only in July 2009. Tibrewala and Mehta go back a long way—the two had previously set up Homeindia.com way back in 1996. Homeindia.com was first a free online postal service targeted at NRIs and then shifted to e-commerce in 1998 with gifts.
Headquartered in Mumbai, the company also has offices in Delhi and Chennai and employs over 170 people. It works with more than 50 top brands and its key clients include Franklin Templeton, Apollo Hospitals, Idea Cellular and GE India Industrial. The startup helps brands manage their social media communication.
Based on the brand brief, it creates a social media strategy, offering content creation, execution, platform management, listening and monitoring services. While its communication team helps the brand connect with consumers on social networking sites, its listening team helps in 'Online Reputation Management', as well as identifying sales opportunities.
Social Wavelength is looking to increase its client base to 75 in 12 months, as well as offer a larger basket of services to its existing clients. While the agency does not see a significant increase in the team size, it will look to expand to more cities in the country.
Social Wavelength marks WPP's fifth acquisition in India in the last four years and marks a further step in WPP's strategy of developing its networks in fast-growth markets and sectors. In India, WPP companies (including associates) generate revenues of nearly $500 million and employ almost 13,000 people. Also, like-for-like revenue growth in India was 4.6 per cent in 2013 (excluding associates).
In 2012, JWT Singapore had acquired a majority stake in digital services agency, Hungama Digital Services (HDS), the Mumbai-based digital and promotions marketing division of Hungama Digital Media Entertainment Pvt Ltd for an undisclosed sum. In January this year, HDS appointed Mohit Hira, senior vice president and head (digital) at JWT India, as its first CEO.
(Edited by Joby Puthuparampil Johnson)