Angels to pocket over 20 times returns from sale of Singapore’s Hepmil

HEPMIL Media Group’s acquisition by French advertising agency Publicis Groupe – a rare exit in an otherwise tepid year for South-east Asian startups – was a win for its founders and early backers.

Jeffrey Seah, among Hepmil’s earliest investors and the general partner of MSW Ventures, tells Tech in Asia that the first angel investors who backed Hepmil Group via the special purpose vehicle Oobmil in 2017 are projected to make returns “in excess of 20x.”

Seah, who has also led investments in Hepmil via two other funds – MSW Ventures’ Asia Fund X and Quest Ventures’ Asia Fund II – has sat on Hepmil’s board of directors as vice-chairman since 2017.

The size of the deal and Hepmil’s new valuation were not disclosed. And as there has been no mention or formal filing of Publicis stock being used as consideration for purchase, the deal can be assumed to be paid out fully in cash. Seah declined to share specifics.

Tech in Asia understands that all Hepmil staff are expected to be joining the French company.

Publicis Groupe’s acquisition of the Singapore-based media firm follows a string of other acquisitions it made in the past year. These include Latin America-based influencer marketing platform BR Media Group – for a reported US$110 million – in February and influencer marketing platform Captiv8 in May.

With the proceeds from the deal, the firm’s co-founders and two largest shareholders, Karl Mak and Adrian Ang, could join the ranks of Singapore’s wealthiest.

Other tech founders, such as Secretlab co-founder Ian Ang, have afforded to buy good-class bungalows – worth tens of millions of US dollars – in recent years. Mak and Ang could now afford the same, Tech in Asia understands.

In an age of TikTok, more brands are turning to influencer-based marketing, meme content, and other creator commerce formats, rather than relying on traditional SEO-based methods, Facebook ads, or programmatic ads alone. Witty meme content was a category that Hepmil’s SGAG found early fame in.

Today, Hepmil Media Group’s umbrella extends to brands including MGAG and PGAG, which similarly publish humorous content, as well as digital creator content agency Hepmil Creator’s Network.

Hepmil was founded in 2015, and while revenue stagnated for a few years between 2017 and 2019, it saw a lift in 2020 due to an explosion in short-form video content on TikTok.

According to Publicis Groupe, Hepmil serves over 450 brands and has relationships with over 3,000 creators. It also has a total creator reach of over 1 billion in six South-east Asian markets.

The Singapore media company is not a stranger to the M&A road. In late 2018, the firm was almost sold to a potential acquirer, but talks did not progress beyond the early stages.

A little history

Both Hepmil and Publicis Groupe have a relationship that dates back several years. Large brands typically appoint a major advertising agency – like Publicis Groupe – when expanding into a new market. In turn, these agencies partner with regional entities such as Hepmil with connections to local creators.

Hepmil Media Group’s 2023 financials show that Singapore was the firm’s largest market, bringing in about 80 per cent of the S$14.4 million in revenue. Its next largest markets are the Philippines and Malaysia, in that order.

While its revenue fell short of the US$18 million projection that CEO Mak made in July 2023, it still marked a year-on-year increase of 12 per cent.

According to Seah, Hepmil received “multiple term sheets” in the last 18 months. Interested parties over the years include listed Asia-based media organisations as well as major marketing communications groups from Asia, Europe, and North America.

It also saw interest from “financial private equity firms with influencer assets” as well as global consumer conglomerates looking to shift distribution from traditional retail channels to digital platforms.

At a time when global advertising giants such as Dentsu Group are planning to sell off its international business and other agency groups are struggling, Hepmil’s acquisition on an upside seems a feat.

You could say it’s due to the growth expectations of the advertising market in South-east Asia, which is expected to rise by 14.8 per cent to US$56.5 billion by 2030. That makes it one of the fastest-growing markets globally. TECH IN ASIA