Sir Martin Sorrell has joined forces with Stanhope Capital and former WPP executive Sanja Partalo to launch a new venture capital company, S4S Ventures.
As much as $150m will be put into early-stage tech firms in and around marketing and advertising, with an emphasis on the US, Europe and the Middle East. It hopes to raise that cash from other investors.
Sorrell and Pinto are set to sit on the VC firm’s investment committee; according to a statement, Sorrell is investing directly in the fund, rather than S4 Capital itself.
In a statement, Sorrell said: “S4S’s aim is to be a very engaged and creative equity owner. The fund will provide investee companies with more than capital – offering differentiated value through the advantage afforded by the S4 network and our specialist knowledge with geographical, client and talent inputs. We are in a strong position to help portfolio companies validate ideas, launch products, accelerate growth with clients and partners and help engineer strategic partnerships, investments and exits.”
Partalo added: “We are entering ‘web3’ – the next stage of digital evolution. It is an incredibly fertile environment for startups which are focused on transforming the marketing and advertising sector through new technologies. Regulatory, demographic and technological catalysts – such as a stricter privacy and regulatory environment for the tech giants, the rise of gen Z, the democratization of AI infrastructure and the dawn of the metaverse – mean that this segment of the venture market benefits from significant tailwinds, presenting an exciting opportunity for investors.”
Why launch a VC firm?
Mergers and acquisitions activity in the marketing sector has sped up over the last year. S4 Capital itself has been involved in many deals, as Sorrell seeks to grow his Media.Monks network.
In a press release from S4S, a spokesperson for the new business said there had been an “unprecedented” number of IPOs in the industry and that it was going through a boom.
According to Pinto “venture capital itself is in the midst of profound structural change, as more money flows into private markets.”
“Both investors and investee companies have identified the sweet spot of value generation as being highly specialized, value-led partnerships between founders and investment firms,” he added.
“S4S‘s investment strategy, team composition and strategic alignment with S4 deliver this and represent an exciting new breed of venture capital firm.”