Advertisers Moving to where the Consumers are
In the early 2010s, the shift from print-based to online media was an established trend. Consumers in Egypt wanted access to information more quickly and efficiently than newspapers could offer. Still in its infancy, and with an internet penetration rate of less than 2% in the early 2000s, Mohamed El Mehairy, CEO of Connect Ads - a digital media and advertising solutions provider specializing in the Middle East and North Africa [MENA] region - knew there was an opportunity to make the internet an essential part of the media mix in the region, starting from Egypt.
“At the time, not a lot of people were comfortable navigating and getting news from websites,” Mehairy recalls. “But early on, we started to sense that the online space was a place we wanted to be in, and like any other medium, we knew it could be supported by advertising.”
Enter Microsoft & Global Tech Players
Until 2004, selling online advertising in Egypt, where Connect Ads first started its operations, was not an "easy feat" as there was minimal connectivity. By 2001, a few local Arabic portals were fighting to tap into what was then seen as a relatively small market in Egypt, consisting of less than 2 million internet users. A long-term partner of A15 and its affiliates, Microsoft saw an opportunity to join forces with A15 to launch MSN Arabia, the first international multilingual portal set up in the Middle East.
“Back then, Hotmail and Messenger were King and Queen, so getting the opportunity to work with Microsoft on the hottest properties, bundled with MSN, enabled us to talk to all the big players in the region,” said Mehairy.
Through the successful launch of Microsoft’s products and services into the MENA region, Connect Ads expanded its regional footprint. Since A15's initial Microsoft introduction, Connect Ads has collaborated with other global internet players looking for ways to penetrate the MENA market. Armed with a "winning formula," the company replicated similar market launches with multinationals, including Facebook, Twitter, LinkedIn and TikTok. The firm has worked with local advertising agencies and top global agencies like Starcom and Mediacom.
Connect Ads was later sold in 2009.
Scaling and Growing the Company
Having shown significant growth and potential in the MENA market, A15 bought back a majority share of Connects Ads in 2014 to build out its suite of digital marketing products and navigate the company's rapid expansion into new expansion territories.
As with all companies it invests in, A15 kept the entire management team and focused on supporting Connect Ads with the right partnerships and contacts. It introduced Connect Ads to potential clients in the market, which allowed the firm to win contracts and prove its business model. A15 also advised the firm on growing its business and pitching its value proposition to new clients.
"Growing and scaling a company is not easy at times, and the hardest part is to keep scaling. This is where A15 came in; they showed us the ropes. We relied on their shared resources"
Using those resources, Connect Ads grew its digital footprint to multiple countries and gained significant market shares in the Gulf Cooperation Council States, such as the United Arab Emirates, Saudi Arabia, and Egypt, North Africa, APAC, Italy and Turkey.
Connect Ads was also able to tap into A15's resources to support its Finance, HR, and Business
Development functions until it could operate as a standalone company and appeal to investors.
"Growing and scaling a company is not easy at times, and the hardest part is to keep scaling. This is where A15 came in; they showed us the ropes. We relied on their shared resources", said Mehairy, who described its relationship with A15 as a "360 kind of approach".
Through the support provided by A15, Connect Ads was able to scale from a 3-man operation to a fully-fledged digital media company with a team of 190 people across 15 markets in EMEA with a physical presence in nine countries.
Connect Ads Road to Exit
In early 2022, Connect Ads closed on its acquisition by Aleph Group Inc [Aleph], the leading global enabler of digital advertising. Backed by international investors, including CVC, Twitter, and Snapchat, Aleph serves over 1,200 local digital advertising professionals in over 90 countries and over 60 languages. Leveraging its M&A experience, A15 played a pivotal role in structuring, negotiating and closing the deal.
The sale process, whose genesis can be traced back to 2016, was conducted under the guidance of A15 General Partner Karim Beshara and was a process that "was very new" to almost everyone within the Connect Ads organization including Mehairy. "A15's support with the sale process was integral. We know operations and business, but we weren't familiar with how the mechanics of such a deal would work, especially as it was concluded during the COVID-19 pandemic when everything was on hold; it was a very lengthy process at many moments," said Mehairy
Following a flip-up of its remaining stake in Connect Ads into Aleph shares, A15 holds a meaningful stake in Aleph and still holds a minority shareholding in Connect Ads.
Online and Digital Representation Still Growing
The online and digital representation will continue to grow and expand as long as internet penetration increases. As the advertising and media space takes different shapes and forms, the team at Connect Ads will continue to "adapt and adopt new techniques" that will offer the advertiser the same benefit and confidence to the publisher. "The whole idea is to be ready for the next wave of technology," the CEO added.
Following the acquisition, the collaboration with A15 remains the same; the VC is committed to guiding Connect Ads as the company scales. "We still see A15 as an important part of the Connect Ads story going forward."