The former CEO of ad tech firm Undertone is starting his second act with his own investment fund — and his first big bet is an e-commerce agency
22/8/2018

• Ad tech veteran and former Undertone CEO and chairman Michael Cassidy has launched a family office fund, and his first big investment is in e-commerce agency BVAccel.
• The idea is that as brands try to navigate e-commerce and build their own digital storefronts, agency partners like BVAccel can help them.
• The fund, called August Spark, aims to address the gap in investor expertise in the marketing and businesses services space, according to Cassidy.

Ad tech veteran Michael Cassidy is embarking on his second act – and his first big bet is on the future of e-commerce.

The former CEO and chairman of ad tech company Undertone is trying to build a portfolio of profitable companies centered around technology and marketing services through August Spark, a family office fund he launched 18 months ago and runs with cofounder Stephen Wall.

His first big investment is in San Diego-based e-commerce agency BVAccel, which helps design, build, and optimize digital storefronts for several hot and up-and-coming direct-to-consumer brands. It also provides marketing services to clients, using data to map out the customer journey and optimize their e-commerce websites for conversion.

The idea is that as e-commerce starts to displace physical retail, brands of all sizes need help as they try to build and scale their digital storefronts. And while they have tools like Square and Shopify at their disposal, they need agency partners like BVAccel, which can help them serve consumers across multiple channels and devices.

“While e-commerce isn’t new, the phenomena of digitally native vertical brands is still new – and traditional brands haven’t even been impacted yet,” Cassidy told Business Insider. “BVAccel is uniquely positioned to help the next generation of retailers and brands build technology, promote their products, and expand into physical retail and beyond.”

Both Cassidy and Wall will join BVAccel’s board of directors as part of the transaction. August Spark declined to share the value of its investment, but said that it owns approximately 70% of the company. The fund will typically aim to invest in companies with $5 million plus in revenue, purchasing between 60% to 80% of a company.

August Spark aims to address the gap in investor expertise in the marketing and businesses services space, Cassidy said, and aims to have founders continue to support the business as employees, board members or advisors.

“It sends the right message that sellers still believe the company has upside,” he said. “Family offices are an attractive financing alternative for companies because it offers more flexibility and support than a typical PE and VC fund.”

BVAccel, which launched in 2013, has a successful track-record of helping several brands and their online stores, particularly on the back of the Shopify Platform. It counts the likes of RedBull, Rebecca Minkoff, Tommy John, Chubbies, Untuckit, and MVMT Watches as part of its client roster.

Many of these brands, such as MVMT, are fast-growing but still pretty small in terms of their workforces. So outsourcing the building of their e-commerce ecosystem to BVAccel as they chase scale has been valuable to them.

“Shared external resources make sense in e-commerce as it gives retailers the time to focus on their product and customers, while partners like BVAccel build the technical foundation and facilitate more automated marketing,” said Alicia Radabaugh, director of e-commerce at MVMT. “Digitally native brands learn this by being scrappy and outsourcing, but there is a definite benefit of working with an agency who can quickly apply best-practices.”

With the capital being injected, BVAccel plans to focus on areas such as sales, marketing and service lines, and will also invest in employee development and training. Additionally, it will use the investment to accelerate its product roadmap and build new capabilities to support global customers, including Amazon, and offline sales support.

“BVAccel hasn’t historically invested in sales and marketing and product line expansion, which makes us believe we can double the business very quickly by prioritizing these areas,” said Cassidy. “We can be helpful through our experiences, expertise, and leveraging our networks.”

Moving forward, as brands expand their e-commerce operations and look to scope out their Amazon strategies, Cassidy believes that the demand for partners like BVAccel will only increase.

“We are well positioned to be a $100 million plus company supporting clients and being a helpful partner to them,” he said. “I believe this company can be bigger than Undertone.”