Shanghai-based digital marketing agency Mailman Sports on Wednesday announced a partnership with WePiao investment subsidiary WeCapital -- whose investors include Tencent, Wanda and China Media Capital -- and WePiao's sports ticketing arm, WeSai. WeCapital and WeSai paid 100M yuan ($15M) for a 35% stake in the agency. CEO Andrew Collins said, "We've had a lot of fun milestones along the way, but nothing as significant as this. This would be our biggest home run." He said that Mailman Sports, which was founded in '07, began talks with potential investors this spring. After discussions with two other interested organizations, Mailman moved quickly following a meeting with WeCapital Chair Tang Xiaoming in Beijing in May. "We couldn't be happier with the platform that we have with them," Collins told SBD Global. "They have a sort of technology and innovation-first approach to how they build their business. ... Everything just seemed to align, and that's where we're at today." He said in a statement, "After 10 years we’ve taken the company about as far as we can go without any local investment or government support. ... Yet, winning in China is near impossible without a local partner." When asked to elaborate on that idea, he added, "I think any business, when it hits a certain scale in China, will hit a ceiling unless you find a great marriage. Or what some sports properties do, or entertainment properties do, they sell the rights to that success to a local partner, where they can realize the success. So for us, we weren't really going to sell the business just yet. It's a marriage, and it gives us the edge we need to actually become what I imagine will be quite a large publicly-traded company over the next four to five years in China."
LOOKING AHEAD: Collins expects the influx of cash to open up new opportunities and allow the agency to increase its staff -- it currently has around 80 employees -- by 20%. As for the biggest difference the investment will make in how Mailman will operate, he said, "[It will allow us to] buy rights, most importantly. Instead of servicing everyone and trying to do all things for everybody, we will look to acquire some rights to what we're doing. Also to build sports IP ourselves. We'll be looking to build out more value in e-commerce. That will be investment in e-commerce within the WeSai and WeChat platform." Collins also said that Mailman will be adding investors soon. "As part of our agreement, we will be offering some stock to another investor over the next six months," he said. "That may even potentially be some of the professional athletes we work with or another investment fund that offers strategic value." Describing the changing landscape in China due to President Xi Jinping's emphasis on the growth of football and sports in general, Collins referenced the culture in his home country of Australia. There, he said, people are asked not whether they play sports, but which sport they prefer. He believes it's a matter of time before this becomes the case in China -- where Mailman estimates 11B yuan ($1.65B) has been invested in domestic sports in the last six months. "In a word, amazing," he said of the recent growth of the industry. "The interest in sports, it's almost like a revolution right now across China. Not just in football, in tennis, in basketball, in gyms, just participating in sports, it's exploding. I think sport is going to very quickly become part of culture."
