S4Capital, Stanhope launch S4S Ventures fund

Co-founder and managing partner Sanja Partalo will head the S4S Ventures fund team. Partalo was formerly the global head of strategic development and partnerships at advertising agency WPP.

S4Capital is a digital advertising and marketing services company founded by Sir Martin Sorrell, while Stanhope Capital Group is an investment holding with USD 30bn in assets under management.

S4S will be run as a joint venture between the two firms. Both firms will act as part of the general partners for S4S, according to a statement. Both Sorrell and Stanhope founder Daniel Pinto will take roles on the new firm's investment committee.

Pinto told Unquote that the fund came about following initial discussions between him and Sorrel approximately six months ago, in which they established that it would make sense to capitalise on the advertising technology and marketing technology startup opportunities that S4Capital was seeing, combining industry networks and venture capital experience in a joint venture that provides the capacity to take advantage of this with a sector-specific approach.

Investors
Martin Sorrell and Daniel Pinto, the founders of S4Capital and Stanhope respectively, will invest in the fund, according to a statement. They are expected to be joined by members of the management teams of both funds, as well as external high-net-worth individuals and global institutional investors, according to a statement, Pinto told Unquote.

Investments
The fund will target five core sectors: marketing technology, advertising technology, data technology, creative technology, and emerging digital media/content. It expects to make early-stage investments, focusing on companies involved with the digital transformation of the marketing and advertising sectors.

The fund will prioritise investments in companies that address its five core parts of digitalisation: the acceleration of programmatic advertising across Connected TV, gaming and digital audio ecosystems; data warehousing, ingestion and analysis for identity resolution; cloud and AI-based content development and workflow management; the monetisation of metaverse opportunities via software tools for creator and brand participation; and emerging digital media that are capturing the attention of Generation Z.

The fund will invest in the US, Europe and the Middle East. It does not have set allocations for each geography, Pinto told Unquote, although a "meaningful" portion will be reserved for Europe. The fund is expected to invest in 10-15 companies, generally in Series A rounds but with the capacity to participate in Series B or C on a case by case basis. It will generally deploy tickets of around USD 5m, but has the option to deploy smaller or larger tickets where necessary.

The vehicle will target returns of at least 4x money.

In terms of exits, Pinto told Unquote that the fund and its team will be able to act as "patient investors" during the investment period, supporting the development of the portfolio. Exits could be in various forms over time, including trade sales or IPOs, he said.

People
S4S Ventures – Sanja Partalo (co-founder, managing partner).
S4Capital – Martin Sorrell (executive chairman).
Stanhope Capital Group – Daniel Pinto (founder, CEO).

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