A Glasgow-based smart mobile marketing agency has sold a 10 per cent stake to a client, valuing the business at £10 million, and doubling its valuation from just nine months ago.
Digitonic, which was founded in 2011 with £4,000, said the latest investment comes from one of its biggest clients and will help it expand into the US as it looks to double staff over the next 18 months.
The cash injection includes a commitment from the new investors to deliver $5m (£3.8m) in additional revenue for Digitonic over the next two years via the Stateside move.
The firm was set up by Grant Fraser and Iain Wilcox, who each invested £2,000 to buy two laptops, two mobile phones, and settle the first payment for a small office in Glasgow.
It is now ranked eighth in the UK IP100, which ranks the top “IP-savvy” and innovative organisations in the UK, and is currently relocating to a larger office space in Glasgow city centre, as well as looking to establish a presence in London.
Chief executive Fraser said the firm’s growth has been fuelled in part by “long-term retention of quality clients and partners who trust us to acquire and retain customers through our proprietary technology”.
He added: “As a business, we have grown via innovation and commercialisation, and we are now at a point where we are ready to accelerate our growth. While we are very proud of the fact that we have been able to grow without ever having to take a loan or give away substantial equity in order to fuel our sustained growth, this investment will enable us to rapidly grow the business.”
The latest investment comes after a consortium of four London-based investment angels in 2014 acquired a 10 per cent stake in the tech firm, valuing it at £2,250,000. Fraser said: “The first external investment in 2014 was to fuel innovation around our core mobile messaging platforms. However, the business commercialised much faster than we had first anticipated, so this money still remains untouched.”
Additionally, in April last year, Digitonic trademarked “smart mobile marketing”, and later sold a further 2 per cent stake to an “experienced Edinburgh-based investor” who now sits on its advisory board, valuing the company at £5,000,000 in July of last year.
Fraser said that he and Wilcox are very proud to have turned £4,000 into a business worth £10m, while retaining more than 75 per cent of the shares.
“We are now one of the fastest-growing companies in our sector, and we are excited to see what the next eight years bring as we plan to open a new office in London later this year, and expand our client base into international markets.”