BGF exits The Exchange Lab

BGF has successfully exited its investment in The Exchange Lab, a programmatic marketing solutions company, following its acquisition by WPP for an undisclosed sum. The Exchange Lab’s people and technology will be integrated into WPP’s GroupM.

BGF provided £5m of growth capital to The Exchange Lab in November 2013. The company invested BGF’s capital in its proprietary Proteus platform, integrating an additional eight Demand Side Platforms (DSPs) and boosting campaign automation by developing advanced APIs. The Exchange Lab also embarked on a focused sales strategy in North America, delivering top line growth and demonstrating commercial scale on the Proteus platform.

This is the second high-profile ‘scale-up’ exit for BGF in the technology, media and telecommunications (TMT) sector following the acquisition of Unruly by Newscorp in September 2012. BGF has invested close to £650m from its £2.5bn investment pool, including more than £130m in TMT businesses headquartered in Britain.

The Exchange Lab, co-founded by entrepreneurs James Aitken and Tim Webster, delivers digital advertising campaigns across display, video, social media and mobile channels, evaluating a billion audience interactions daily. The Proteus platform provides advertisers and brands with visibility across twelve DSPs, enabling them to access unrivalled volumes of digital inventory at lowest cost. The Exchange Lab will now become a core component of Connect, part of GroupM, to expand its multi-platform (meta-DSP) approach.

Chris Hodges, an investor at BGF oversaw BGF’s initial investment in The Exchange Lab and served as BGF’s non-executive director. Chris will step down from the Board following BGF’s exit.

Chris Dobson, CEO of The Exchange Lab said: “We enjoyed tremendous support from BGF over the past two years and we could have happily continued our growth plans with their backing. At the same time, they have wholly supported our decision to progress to the next stage of our development as part of WPP’s GroupM, the world’s leading media investment management group. The synergies between The Exchange Lab and GroupM create a powerful and compelling offering for clients and we are excited about taking this next step.”

Commenting on the exit, which will produce an attractive return for all shareholders, Chris Hodges said: “The Exchange Lab is another great example of the talent, energy and ambition in the UK TMT sector. Our growth capital has helped the business expand internationally, introduce new technologies and build scale, which has created value for the founders and shareholders. We are immensely proud of all that James, Tim and the team have achieved, and we look forward to seeing Proteus support even higher volumes of global programmatic buying as part of GroupM.”

BGF Investor Ben Kirby supported Chris and the board throughout the period of BGF’s involvement. Ben also executed the original investment in November 2013 alongside fellow BGF Investor George Tsangarides.

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