Why this nine-time Young Rich Lister joined the board of a $14m adtech
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You might have heard the name Mark McConnell.
He is a nine-time Australian Financial Review Young Rich Lister and co-founder of Citadel Group (ASX:CGL), an IT services company specialising in security that made more then $100 million in revenue last financial year.
He uncomfortably confirmed to Stockhead he’s worth “somewhere in the ball park” of between $100 million and $200 million.
On Tuesday, Adveritas (ASX:AV1), an adtech company formerly known as Tech Mpire, announced Mr McConnell was joining their board, along with Andrew Stott, a high-powered, tech-focused head of a law firm.
You’d be forgiven for asking: why would someone like Mr McConnell join a small tech company with a market cap of just over $14 million?
“I couldn’t find another company anywhere in the world that is doing what they are doing,” Mr McConnell tells Stockhead over the phone. “This company is really on to something.”
He tried to find another company doing what Adveritas was doing. Mr McConnell is a fastidious investor, and conducted significant research on Adveritas before buying in with a 6 per cent stake in November, a holding he increased to more than 8 per cent just a couple of weeks later.
“Adveritas came on to my radar around July last year, when they signed on Omnicom Group [an American-based global media company worth nearly $24 billion],” Mr McConnell tells Stockhead.
“I thought if Omnicom had gone all the way to a $14 million cashbox in Perth then there must be something in it.
“So I hired third-party consultants and had a really good, long look under the covers and then got on board.”
Adveritas offers online and mobile marketing solutions. It also owns fraud mitigation software called TrafficGuard and an analytics data platform called nxus.
Mr McConnell says the company’s mobile solution puts them ahead of the game.
“No one is doing what they are doing with a mobile-first focus, which is especially important amongst the growing middle class in southeast Asia where everything is largely app-based,” he says.
“And so I was very happy to support them with a deal, a private placement at a premium to show my support.
“It is a big risk because if it falls over there is the potential for blowback onto Citadel, which would be a bad look, so I spent a lot of time doing due diligence before aligning myself with them and then being invited to join the board.”
He says the company’s most recent deal, announced Thursday, would open the company up to a world of potential clients — TrafficGuard was integrated with HasOffers, a SaaS product for managing partner programs made by TUNE, a Seattle-based tech company.
“That is an extremely important announcement,” he says. “We are at the right place at the right time with the right people and this is the start of a significant trajectory.”
How he got here and how to relax
Mr McConnell is a serial founder, entrepreneur and director and has worked across the technology, agriculture, non-profit and sporting sectors, not to mention a long career in private equity. Oh, and he’s also done some time in the military for the RAAF.
“I found myself in a private equity firm, where I pumped over $1 billion into the Australian economy over an eight-year period,” he explains. “Mostly through the mining boom and commercial property.
“The proceeds and income from that went into Citadel and also a range of other ventures.
“I have taken a very fussy approach, I don’t give money to brokers or fund managers. Part of the capital curve is that there is a lot of risk and I have worked hard to mitigate that.”
So what does he do with his downtime? Heliskiing — off-trail skiing reached by a helicopter rather than a ski lift.
“Work hard, play hard,” he says with a chuckle. “I am lucky that I get the opportunity to do this about two or three times a year.
“I’ve been to Russia, Japan, Canada, the US, Iceland in the last few years.
“I have an amazingly supportive wife and family.”