Integrated Media Company (IMC), the digital media investment arm of private equity giant TPG, has acquired the majority stake in StackCommerce, an e-commerce platform that connects publishers with brands to sell products through content.
Why it matters: "TPG is an investor in a lot of media companies," says Josh Payne, Founder and CEO of StackCommerce. "Those connections are incredibly valuable."
- IMC will acquire a majority stake in StackCommerce, and Payne will retain most of the minority stake. Financial terms of the deal were not disclosed.
StackCommerce, which brought in $80 million in gross revenue in 2020, saw its business boom in light of pandemic-driven e-commerce demand, Payne says.
- Publishers that were wary about e-commerce prior to the crisis began to change their minds in Q2 and Q3 of last year when the ad market crashed, Payne notes.
- The company saw a 50% increase in gross sales year-over-year in 2020.
The big picture: IMC sees the investment as an opportunity to better integrate e-commerce into the revenue strategies of some of its existing media investments. Last year, it acquired a majority stake in Goal — a global digital soccer brand — from DAZN.
Catch up quick: Payne founded StackCommerce over nine years ago in Los Angeles. The company has since grown to become the e-commerce platform of choice for over 1,000 publishers, including CNN, Mashable, Hearst, TMZ and more.
- It also works with more than 5,000 brands — mostly independent or direct-to-consumer companies — to help connect them to media companies to sell their products via content recommendations.
Be smart: Affiliate marketing isn't new, but the industry is outdated. Most media companies use in-house editors or freelancers to write articles pushing content to Amazon or other big retailers.
- As seen during the early days of the pandemic when companies like Amazon pulled the plug on commissions, it can be devastating for media businesses to be overly-reliant on a few big distributors for cash.
- Like Shopify, StackCommerce acts as a middleman between brands and publishers, but it's not a wholesaler. The company gives publishers access to purchasing data so that publishers can optimize their content for better returns.
Publishers like StackCommerce because it pays them a higher percentage of the goods they sell through sponsored content than traditional affiliate marketing agreements.
- Media companies are typically paid out up to 20% for the products they help push via StackCommerce, instead of the typical 5% cut.
- To-date, StackCommerce's publishing partners have earned more than $175 million from e-commerce deals through the platform.
Brands like StackCommerce because the company helps them find inventory to place sponsored content.
- StackCommerce will also help companies market their products via content beyond publisher websites, through paid social media promotion on apps like Instagram, Facebook and increasingly TikTok.
What's next: With the investment, Payne is hoping to acquire additional affiliate commerce tools and potentially a few direct-to-consumer brands that StackCommerce can help grow through its commerce platform.
