Malaysia’s iMedia is on an M&A spree, set to announce one deal by year-end

iMedia CEO and co-founder Voon Tze Khay

Malaysia’s integrated digital media group iMedia is betting big on the inorganic route as it carves out its expansion plans for the year ahead.

It is looking to announce at least one more investment before the year-end that could either be in the form of a merger or an acquisition, its CEO and co-founder Voon Tze Khay told DealStreetAsia.

“Right now, our focus is building the revenue and profit of the business. M&A is still a key strategy for us moving forward, but we would be very cautious in terms of how the entity would fit into iMedia’s integrated ecosystem,” said Voon.

Since its inception early last year, iMedia has already confirmed six acquisitions. Aside from beauty e-commerce platform and influencer marketing company Favful, iMedia has completed the acquisition of viral content platform OhMedia, social influencer platform Ittify, social news portal Goody25, celebrity gossip channel BeautifulNara, and Chinese language portal Moretify.

The goal of the acquisitions is to instantly get a monetisable pool of audience, said Voon. iMedia holds a majority stake in all of the companies it acquired, mainly bought from founders – most of them are not venture-backed.

iMedia generates revenue from three main segments – content marketing, influencer marketing, and selling advertisement spots. The bulk of its revenue comes from producing content for advertisers – in the form of videos or articles that are published and distributed across various platforms.

Meanwhile, influencer marketing is a growing revenue stream, which involves roping in Key Opinion Leaders (KOLs) into marketing campaigns. The service includes supplying iMedia’s clients with a marketing strategy and recommending a suitable KOL to execute the campaign. Voon said iMedia is looking to expand this segment, with intentions of launching a social media agency business in the future.

“The next step for us is to look at other avenues of revenue growth, aside from what we are already doing. Via the Favful acquisition, we plan to venture into social commerce as well as e-commerce,” said Voon.

iMedia plans to leverage its network of owned and managed websites – which now reaches over 15 million Malaysians every month – to create a future revenue stream in which the company’s network of KOLs would market products available on Favful’s platform. Additionally, the company is also looking to launch its own brand of beauty products via white labelling services and selling them with the help of the KOLs, said Voon.

“Don’t get me wrong – we are not trying to be a marketplace like Shopee or Lazada and we are not aspiring to be one. What we want to do is to create a trusted beauty platform, where we can help niche beauty brands sell their products while also offering our own products, which can expand to personal care and lifestyle products,” he added.

Rev Asia acquisition 

In September last year, Malaysia’s ACE Market-listed Rev Asia Bhd entered into a share sale agreement with the owners of iMedia – Catcha Investments Ltd and iCreative Asia Sdn Bhd – to acquire a 100% equity interest in the company for 10 million ringgit.

Voon said that the acquisition, which was initially expected to be completed by mid-2021, faced delays due to Malaysia’s ongoing movement control order caused by the pandemic.

Currently, Catcha Investments – which comprises Catcha Group co-founders Patrick Grove and Luke Elliott, owns 54% stake in iMedia. Meanwhile, iCreative, which consists of Voon and three other partners – Loh Ken Wei, Jacky Tee, and Brian Alexis – owns the remaining 46%.

It is worth noting that both Grove and Elliott control Catcha Group Pte Ltd, which in turn controls a 43.75% stake in Rev Asia.

The acquisition will be realised through the issuance of 40 million ordinary shares of Rev Asia at an issue price of 0.25 ringgit apiece, according to a stock exchange filing.

If iMedia achieves a net profit of more than 3 million ringgit in 2021 as projected by Rev Asia, the proposed acquisition would total to 40 million ringgit, according to a statement by Rev Asia. This is an achievable target, said Voon, adding that the company has achieved a strong financial performance in the first quarter of the year.

According to a statement by iMedia, the company’s unaudited revenue for Q12021 showed an 81% growth versus the same quarter in the preceding year. The company also registered a healthy profit after tax and minority interest, on top of over-achieving its budget for Q12021 by 96%.

Prior to setting up iMedia, Voon and his co-founders – all of whom were previously staff members of Rev Asia – formed iCre8 Asia, a digital sales and media company. Voon himself has had a long stint at the company, having spent over 10 years working for Catcha Media and eventually Rev Asia, before stepping down from his managing director position in August 2019.

Voon said regardless of whether or not the company manages to complete the transaction with Rev Asia, it would continue with its business expansion plans which includes scaling to other Southeast Asian countries, such as Indonesia, Vietnam, and the Philippines. This will be done using the same strategy it had executed in Malaysia.

“We are a profitable company generating decent revenue, we don’t think that we would be looking at speaking to external investors,” said Voon.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.