Australian media monitoring company Streem has been bought by the US-based Cision.
Founder and CEO Elgar Welch joined Unmade’s Tim Burrowes to discuss how the deal came about, what it will mean for customers and where the company goes from here.
The conversation can be heard via the player in this post, or the Unmade podcast can be found on all the major podcasting apps.
Transcript
Tim Burrowes:
Welcome to a bonus edition of The Unmade Podcast. I'm Tim Burrowes. It's been a meteoric rise for media monitoring service, Streem, officially launched less than 5 years ago. This week Streem was acquired by the US based PR intelligence company, Cision. Streem's Founder is Elgar Welch. Elgar, thank you for joining me in what must be a busy week. How did the deal come about?
Elgar Welch:
Thanks for having me, Tim. It's good to be on. Look, Streem's a business that's had a lot of interest in it. It's grown very fast and it's had a lot of interest since the first year of when it launched back in 2017 and lots of people coming to us and saying, can we partner? Can we invest? Can we do all these things? And as we continue to grow really those knocks at the door got louder and louder. And I guess, for us, we've got shareholders and we've got ambitions and for us, we want to get our platform out there as much as we can as well. So, when we continue to have those conversations with people over the last year or so, it became really clear to us that Cision was an excellent partner and we're really happy with them as a partner moving forward.
Tim Burrowes:
So did you decide to run a process where you talked to more organizations than just Cision or did it become exclusive fairly fast?
Elgar Welch:
Look, I think that for us, the process was really driven by the market coming to Streem. As I said, there was a lot of interest in the company really, since it launched and it's in an industry that previously didn't have a lot of competition and it wasn't a particularly interesting industry. I don't think before technology really came along and did a lot of great things in it. So for us that process was driven around people coming and saying, what can we do? How can we work together? And any good company looks at those opportunities and says, we need to explore them. We'd certainly looked at lots of options and talked to lots of different people over the years. And Cision really was the one for us.
Tim Burrowes:
I know that one of the things I was taught when I went through a sale process a few years back, was that one of the things that helps you get a fair outcome is competitive tension. If there is more than one potential acquirer. So I suppose when I look at that space, I look at a company like Meltwater, which a few years back, nearly merged with Cision itself. Were they another organization that you talked to? Meltwater?
Elgar Welch:
We talked to a lot of different people and we also talked to people who weren't in the industry as well. People who wanted to help us grow even faster than we were growing. And I guess for us at the end of the day, Tim, really it's important for us to achieve a good price for our business. If we are to sell it. It's also important that the people that we work with and the culture is a fit. And I think that we got, really the best result with the company we went with, with Cision. We've put a lot of effort into Streem, in forms of the culture and the people we've recruited. And I said this to Platinum Equity, who are the private equity company that owns Cision.
Elgar Welch:
And for us, yes, price is really important. Yes, all those terms are really important, but actually the people are really important, too. So we did a lot of cultural due diligence, in that process, just like they did due diligence on us. We also so did cultural due diligence on them and probably vice versa. Can we work with them? What are they going to be like to work with? How are they going to help us run that company? So, financial outcomes, really important. And certainly we've achieved a good one. But also cultural outcome's really important as well. When you've got to tell a hundred staff that this is what we are doing, you've got to be very sure that you've done those checks and you feel comfortable about it.
Tim Burrowes:
When we talk about cultural outcomes, I know that one of those old sayings is show me the incentive and I'll show you the outcome. And it would be good to explore what that means for your customers and for your staff. So, sometimes I think the earnout portion of a sale is constructed with targets around client and staff retention. And that can be good for the customers and good for the culture. And sometimes the earnout is about a profit number. Sometimes that can be an incentive to trim back investment in a product. How is the earnout and the incentive part of this deal structured?
Elgar Welch:
It's a really good question because you're right. Often when companies are acquired, there's this assumption that they've got to suddenly tighten their belts and trim things here and there. I think actually what we saw with Cision was a real desire to invest really hard in Streem and in the ANZ market. It's a new market for them. I mean, they're here with Brand Watch and PR Newswire and Falcon, but they're not here with media monitoring or media analysis or other kinds of services in that area. So for them, this was new, it's a market they wanted to be in. There are a lot of other markets around the world and actually, really what they want to do is invest very hard to make sure Streem grows very quickly.
Elgar Welch:
And it's already done that. It's got to demonstrated history of doing that with its platform and its people. But part of that earnout for us and making sure that we obviously deliver for shareholders is also very aligned to what they want from this platform too, which is to get it in the hands of as many people as possible. So in coming to a deal with Cision, we really looked at how are we going to keep growing it? What is your plan for that business? And we found that actually our growth plan, what we call scale up internally, they looked at that and said, that's perfect. That's exactly what you should keep doing. So we found really common ground on that. And that was a big tick for Streem because ultimately again, when you tell staff and when you tell shareholders and you keep talking to customers as well, you want to be able to say, guys, it's the same as what we've been doing, but a bit more supercharged with a bit more support and a bit more resource.
Tim Burrowes:
And for you personally, how long are you obliged to stay with the business as part of this deal?
Elgar Welch:
Well, I see it as a good thing in forms of me staying. I really like running the business day to day as does Antoine Sabourin, who's our CTO and the other half of the founding team in Streem. And we really enjoy running Streem. It's actually been a, look, it's been an enormous challenge. And we are really glad to have a partner as well, but our intention is to stick around. Look, we'll be here for at least a couple of years. I think that Cision will really find us some more challenges in time as well. And I'm looking forward to that.
Elgar Welch:
I was very clear with Abel Clark, who's their Global CEO that if we can find other things to do in time, let's do that. I mean I think Streem as a platform can be in other markets. I think we can help them on that front. It'll be ultimately up to them, but there'll be other things we can do in time, too.
Tim Burrowes:
Of course. Now you are a sensible person and an entrepreneurial person, so I'm sure you also need to make a plan for if things do diverge down the track as well. Would you be able to come back into the market at the end of that two years, or is there a kind of longer non-compete for you as well?
Elgar Welch:
I just wouldn't do it, Tim. I mean, if you find a good partner, like we have with Cision and you've grown something like we have with Streem, my interest is in that it keeps going and it thrives. So I wouldn't come back into the market. I don't think that's a good thing to do. And I think for us, really what we want to do is focus on growing, growing, growing the next few years. And we've got such great tech and such a great platform. My interest would not be in doing that. It wouldn't be the right thing to do. And frankly for us, we've got an excellent opportunity with Cision, a really amazing company to go and work with. I mean that they are the biggest and the best at a global level. So, no, zero interest in that approach.
Tim Burrowes:
Well, let's ask the question about price, although I suspect that you probably won't be able to say what the deal was worth. So, let me ask it this way. I believe that Streem had reached the point where it was becoming profitable, which obviously gave you lots of runway to carry on doing your own thing. Which obviously says that this was a deal that you made from, presumably, from a position of strength.
Elgar Welch:
That's right. Exactly. And look, we achieved a good price. It's a very good outcome for our shareholders. It's, for many of them, many, many multiples return on their investment and they took a big risk and backed us as a business. But yeah, look, I mean for us, again, price is really important as is the culture piece I talked about earlier. We really wanted to make sure Streem fit somewhere. We're happy with the outcome. We're thrilled.
Tim Burrowes:
We talked about the fact, or you refer to the fact that it's Platinum Private Equity, the company behind it. It found my thinking a bit about when Quadrant came into the media monitoring market by media monitors, a decade ago. That's the company that then became Isentia, of course. Now back then they paid a reported $160,000,000. Now I'm guessing that the scale was probably a bit less than that because it was a bigger, more mature business. And then at the other end of the scale, there was an enterprise value of $67,000,000 when Isentia sold to Access Intelligence a few months back. So I'm guessing the deal would probably be nearer that sort of value the $67,000,000? Would that be a fair assumption?
Tim Burrowes:
You're doing a good job, Tim. That's right. Look, I mean, it's going to be in that region. That's right. And for us, obviously, again, we've got to go through an earnout. We've got to make sure we achieve our numbers and we keep growing that business. But when the company you talk about there was acquired and certainly listed in the market and then acquired some point this year, two totally different businesses, really, from when it listed to when it was privatized and taken off the market, and really not comparable to what Streem is doing either. Quite a different proposition, long run. So, we're very, very happy with what we got in forms of the outcome. But as I said before, you've got to work with these people. You've got to make sure that you can keep going for years to come. And that's the work we did. So yes, let's get a good price, but let's also make sure we can work with those teams for the long run as well.
Tim Burrowes:
Well I said at the beginning of the conversation that Streem launched nearly five years ago, and in truth, you have been sweating it out for a lot longer than that. As far back as 2008, you launched something that was also called Streem as a publishing venture. And certainly even before you launched Streem as a monitoring service in early 2017, you've been working behind the scenes for some time.
Elgar Welch:
That's right. Yeah.
Tim Burrowes:
What actually is the story of the journey? Because very, very rarely it's as meteoric and straight line upwards as it looks from the outside.
Elgar Welch:
I mean, really the concept and the, I guess, the incentive for us to get into media intelligence market when we started working on it in 2014 and obviously commercially launched it in 2017, was my experience as you know, when I worked in government and just looking at a market that had become monopolized and bloated, and I think quite lacked innovation. It didn't have a great reputation for treatment of customers. Now, we're not perfect and that's not necessarily a shot at our competitors, but I think there was a lot more that could be done in that market. And we really felt that when we got in. So we started building that product out in 2014, obviously Antoine and I, we'd both gone to university together. We hadn't studied together, quite different areas, but we actually both sailed together as part of our time at university.
Elgar Welch:
And when the time came, it seemed like the right thing to do and the right market to go after. To be perfectly honest, we really built Streem in the early days. And the thesis behind it was, let's build a really good little news monitoring tool for politicians, media teams, for media advisors, like where I had worked. And it sort of evolved from there. And I remember one of my advisors, Eamon Fitzpatrick, who was actually one of my bosses when I worked down in Canberra. He said, "Look, you've got to go for the corporate market. You've also got to go after them. Government's great, but you've got to make sure you go for everybody." And, that for us is a little bit of a turning point to say, okay, actually, there's this much bigger market here that we can also go after.
Elgar Welch:
And so that's kind of how Streem started to evolve. And obviously we did a lot of testing and a lot of working through with customers between 2014 and 2016/17 when we launched it formally. So we did a lot of work on that, and we'd really, really asked people what they wanted. And when we came in, it was, I think, a bit of a breath of fresh air for a lot of customers to have something quite different to what they'd had previously.
Tim Burrowes:
So for listeners who haven't seen your dashboard, do you mind just talking about the product and what it covers?
Elgar Welch:
Yeah, sure. I mean, look, it's a comprehensive media intelligence tool. Print, online, television, radio, social as well, all that content's delivered in real time. Content's one big thing and we've got to license all that and pay for all that. We then analyze all that information. And really what we've tried to do is move media monitoring from this sort of single email report that you get each morning. And a lot of people still rely on that. And we certainly deliver that, but we've tried to give people a platform experience that's quite different from being alerted straight away to when something goes on air or was published online, through to being able to analyze that coverage. And really where we're heading now, I guess, is more around the measurement of that content. What is the meaning of all that and what does it mean for an organization? That our big opportunity moving forward.
Elgar Welch:
Obviously this year as well, we launched Streem Social, which is our social intelligence tool for comms teams. That's been a raging success because previously Streem wasn't doing a lot in social. We had an influence of social product, but then we put Streem Social out there and that's been excellent. We've had a really nice integration and then, look, in working with Cision as well, we've got that opportunity to supercharge that even further. Cision made an amazing acquisition in Brand Watch earlier this year as well, that's obviously the best probably social intelligence platform in the market. So these sort of things, you can see where the industry's going to start to go.
Tim Burrowes:
And is your technology something that Cision can replicate in their other markets or do they have similar products already?
Elgar Welch:
Look, I think there's a really good opportunity for Cision. It'll ultimately be up to them, but they can absolutely apply Streem's tech in other markets. They could take it into the UK, they could take it into other areas around the world. Asia, the US, all of those sort of places. I mean, ultimately that's going to be their call, but Streem's been built in a way that you can apply it into other markets quite easily. You've got to plug in content and data. You've got to have a local team, obviously. My focus and Antoine's focus over the next couple years obviously is going to be ANZ and growing that really hard. But I think that there's a really good chance that they'll look at that technology and say, actually, that broadcast technology is really quite impressive. We can put that into some other markets we operate in, or, why don't we take the whole platform and put it into a new Greenfield's market. There is that flexibility with the platform. And I think Antoine and the team have just done such a superb job on the technology behind Streem that that was proven out during our due diligence process and during our talks with them.
Tim Burrowes:
So as you mentioned Cision also own PR Newswire. What, if anything, is that likely to mean in the Australian market now that you're in the same family?
Elgar Welch:
Yeah, look, I mean at the end of the day, customers are really looking for a global solution. We're seeing, not just people wanting global content, but the ability to do multi-country deals, putting multiple countries together for their media monitoring, wanting to distribute content internationally as well. I mean, we work for a lot of companies now that have operations in New Zealand or Asia or all the Americas or Europe, and being able to tie those things together is going to be really valuable for customers. So the rationale for a deal like this is, there's a few things in there, but clearly amping up social is a really big part of that. Global content and being able to give Australian customers a global view and vice versa for global customers of Cision into ANZ. And then also things like PR Newswire, tools like that as well. We have an outreach product that allows people to send media releases in Australia and New Zealand, but we also need to be able to send that content overseas. And so combining this all together, it's quite magical.
Tim Burrowes:
Well let me ask about the competitive environment. I've already mentioned Meltwater, I've already mentioned Isentia. Another sort of newer entrant to the market is Truescope, which John Croll, the person who was behind Isentia is behind. Which of them do you think has most to lose, if anything, from the Cision tie up?
Elgar Welch:
Look, I think for us Streem's ambition here is ANZ and really to grow this business so that it's the, we want it to be the majority provider in this market. We want it to be the best and the biggest, we want be able to make sure that people get a great service from us. And that's why having a partnership Cision's important. I think that, I mean, what's incredible about the ANZ market is if you rewind it 10 years, there really was only one provider. You didn't have a lot of choice. Now you've got multiple choices and that's, look ultimately for customers to decide who's going to be the winner from all that. I think that there will continue to be really healthy competition in Australia and New Zealand.
Elgar Welch:
I mean, we certainly see that. We choose not to really compete on price. We try and compete on product and value from that service. So we're going to have to go out and convince people to continuously come over to Streem. I think there's actually room for competition anyway. And I think really our goal here as well, Tim, is that we actually want to grow the market. I mean, so much of the narrative around the media intelligence industry the last 5 years has been there's this pie, it's a certain size and everyone's going to get a piece of that and you might get a little bit more, you might get a little bit less. Actually what we're seeing is that we can sell new products and services to customers.
Elgar Welch:
Social is one of them. Analytics is another one of them. We'll have some really big stuff to talk about early next year around what we're doing with audience analytics. All of these things are actually really helpful to growing the market. And so I see it less about, obviously there's competition. I see it less about taking some from a competitor and putting an into Streem's bucket and more about actually, can we offer something new and different to what media monitoring has been? That's the industry's challenge, move it away from being, we don't want it to be commoditized. We want it to be high value to people.
Tim Burrowes:
And when you say audience analytics, what do you mean by that?
Elgar Welch:
Well, what we want to do is we want to make sure we've got a lot more measurement and validation around the earned media content that we are monitoring. And there's such an opportunity here to be able to say to customers, you're here. This is where your coverage is, and this is the meaning behind it. Here are the audience is consuming that information. Here's where they are geographically. Here's how much time they spend with your brand. The earned media or the comms team are sort of the unsung heroes, really, when you think about it inside of corporates and government, because marketing's done an amazing job at being able to measure the impact of paid media, but earned media, hasn't done that well. It's never had great metrics around it, and that's no one's fault.
Elgar Welch:
It's just that often there hasn't been digital measurement panels or other bits and pieces that could do that well. What we want to do next year is really start to put some shape around that. And I think that if you talk to any comms team, that's what they want. They want to not just show the content, the coverage, they actually want to show the impact of that. And they don't want rubbery numbers. They don't want big numbers or AVEs or dollar values. I mean, everyone loves a dollar value on their press pack. But at the end of the day, what we actually want to do is say, we know who the audience was for this. We know how they engaged. We know how they shared your content. We don't know individually who they are, but we understand the groups of people that are actually really interested in the coverage that you're putting out there.
Tim Burrowes:
I'm relieved to hear that you're not planning on putting a dollar value behind it though, because that is a somewhat controversial way of doing things, isn't it?
Elgar Welch:
It's a conversation that we've had from day one with customers about why we don't like that metric. And look, in think in defence of the industry, I don't think you'll find many people, whether it's from our competitors or elsewhere, that actually love that metric it's often kept in there just because a particular exec might like it or a PR company might like it. That's not a criticism. It's a nice number. You rock up to a meeting and you've got a $100,000,000 worth of free media. It sounds amazing, but it's not right. And the industry can do better.
Tim Burrowes:
So a point I made a bit earlier is that from the outside, these things always look like a smooth upwards trajectory and that's rarely true. What was the hardest thing for you over the last few years?
Elgar Welch:
Look I think that managing a team and we've got 112 or whatever staff now, managing a team is, that's a big challenge. And keeping that going each day. Frankly raising capital and building the products. Those are challenging things to do. But when you add in a lot of people and you've got to remember, you've got a lot of responsibility to those people because they've chosen to come and work for you and they've chosen to put their time in. I think that was probably the most challenging thing for me. I got better at it probably in the last year or two, the first couple of years though, I'd certainly lent on a lot of advisors and a lot of people around me to help me with that. Streem also grew very, very quickly.
Elgar Welch:
And I would often say to staff, they'd say, "Well we need to make sure we address this issue or we need to change this in the business." And I'd often say, "You're absolutely right. We do." The biggest problem for us was that the day we realized we needed it, it was six months too late. And because it was moving at such a quick pace, it's not possible to always get ahead of these things. And I did often have that conversation with staff to make sure they understood. We worked in a really high growth environment and we had staff, for example, Tim, that had come from government, for example, and again, not a criticism of them, that had a certain way of doing things. And they were, I think, appalled sometimes about how we were making decisions.
Elgar Welch:
We were saying, "Hey, great, let's go and do this, that product, we can go and build that." They were not used to an environment that would make decisions that fast and that quickly. And we learned a little bit from them as well, to make sure we did things a bit better and with a bit more process, but ultimately managing people. That's been the biggest challenge. I think I've gotten a lot better, but I think having 100 staff in there, it's not a small organization. It's not an enormous one either, but I know all of those staff and I do feel a real degree of responsibility to them as does Anton.
Tim Burrowes:
And you touched on your advisors as well. They can make a real difference, the right sort of group of people just to help with their experience, when you don't have a particular aspect. Do you want to maybe talk through who your key people in terms of advice over the years have been?
Elgar Welch:
Yeah, look for sure. I mean, my career and where we got to wouldn't be possible without those sort of people. People like Sam Marks, who's on our board, David Wakeley as well on our board. I mean, two really incredible people that have given me just so much of their time. Keith Forbes, who's our COO and our Commercial Director. Keith's been with Streem since, really since the beginning, 2017. He had a background in media intelligence with AAP as well. And someone I'm obviously very good friends with as well as work with day to day. Alan Robertson, Alan, who you know, of course, Tim, as well, came out of the advertising industry.
Tim Burrowes:
Well known in the media industry. Yeah.
Elgar Welch:
"Robbo" as he's known as. Alan spent so much time with me in the early days, hearing my ideas and hearing me out on things. And I just saw Alan today actually to drop a gift off for Christmas. And, I was just saying, we have just known each other for so long, but a person that never asked much, but always was willing to give a lot of time and a lot of effort. Tony Davis, out of Quantium as well, someone who is a big impact on me, certainly in the early days of Streem. I mean, there's a whole lot of people there as well that have given me a lot of their time. And you're absolutely right. You can't build a business without those great people around you.
Elgar Welch:
And in the early days, I really did try and build out an advisory board, an advisory panel. They weren't necessarily our board of directors, but they were shareholders or they were people that could really help us. And it made such a difference to our business. We wouldn't have taken the big leaps forward that we did so quickly if we didn't have them. And I would recommend that to anyone starting a business. Don't just collect names as trophies, really try and find the people that actually are going to spend some really good time with you. And give you such frank advice that you can act on it.
Tim Burrowes:
And the deal doesn't formally close until first quarter of next year. I guess there are always a few regulatory hurdles to go through. Is there a Plan B if the deal does fall over for some reason?
Elgar Welch:
Well look, I think the great thing about what we've agreed with Cision is that we've effectively agreed our scale up plan, which we're executing as we are today. And whilst there's some absolute great benefits from that transaction we've also got a lot of runway in forms of the product we want to build and the plan that we've got. So I don't expect there to be a problem, but if there is, we continue on and we've got our plan and that plan is very aligned with what Cision wants and what we want. So I fully expect we'll be able to do that.
Tim Burrowes:
Well, Elgar, congratulations on the deal. And thank you very much for your time.
Elgar Welch:
Thanks so much, Tim. I really appreciate your time and great to talk to you.
Speaker 2:
The Unmade Podcast is produced with the enthusiastic support of Abe's Audio. More soon. I'm Tim Burrowes. Toodlepip.
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Streem's Elgar Welch on selling to Cision: 'The knocks at the door got louder'