Toronto-based management consulting, design and branding agency Jackman has launched a new venture capital division called Catapult Capital Partners.
It will provide funding to high-potential, early stage companies that possess the potential to “transform” or create categories, complemented by strategy, brand development and creative consulting services. The goal, the company said, is to help those companies come out “faster, stronger and more fully formed.”
Jackman’s traditional focus has been on helping mid- to large-sized companies renew and reinvent themselves ((its clients have included Canadian Tire, Indigo, Maple Leaf Foods, and the U.S. chain Walgreens), but it was not participating in what founder and CEO Joe Jackman (right in main picture) called the “disruption” that is a hallmark of modern start-ups.
These new businesses have quickly grown their customer bases using tools like social media and platforms like Shopify, said Jackman, a 2020 inductee into Canada’s Marketing Hal of Legends.
“All of that was starting to happen while we were working on legacy businesses, many of which were very large scale and had run out of growth and, more concerning, relevance.
“Our clients are not small companies starting new business and aiming to disrupt categories. They are the old guard by definition, and we felt we weren’t getting the opportunity to gain deeper insight into not only what’s possible, but why consumers were starting to really migrate towards these new brands and businesses, [which are] often unproven and untested.
“We thought we’d better get into the swim of that.”
Catapult’s day-to-day operations will be overseen by managing director Niraj Hansoti, who said the goal is to help companies in situations where the “need for cash is high, room for error is low, and speed and precision are of the essence.”
“It’s not just about a marketing campaign or brand ID, it’s understanding which customers they’re for, how we’re going to win with them, and how do we live as a brand and make that come to life across all channels,” he said. “That creates a much stronger growth platform than creating a brand that looks great, but doesn’t really tug at the heartstrings of consumers.”
Jackman will forego fees associated with providing brand work for the companies and turn them into an equity stake. In some cases it will put in cash to increase its equity stake and provide companies with much-needed working capital. “We will consider raising a fund in the future, but at the moment we’re able to make a number of investments per year [currently three to four] and we’ll start to grow that as we go,” said Jackman.
The company has a primary focus on the food and beverage, services and lifestyle sectors, where it has what Hansoti described as “deep experience.” Current investments include Flow Water, the snack brand Neal Brothers, and snack food brand SimplyProtein.
“We’re also looking for the right fit with the company,” said Hansoti. “We don’t typically invest in companies where they’ve got [only] an idea. We look to work with a company that has some traction… has been in market, has tested with consumers, consumers are willing to pay for the product, and there’s some predictability around how they acquire customers.”
It also places an emphasis on the entrepreneurs themselves, said Hansoti, seeking leaders who are receptive to Jackman’s suggestions regarding brand strategy, and are committed to championing diversity and inclusion, and social impact.
Agencies exchanging creative services for equity stakes in clients is not a new phenomenon. Earlier this year, Arlene Dickinson’s Venture Communications launched a new entity called Venturepark that houses five distinct companies that provide capital, marketing, programming, innovation, commercialization and media amplification for companies in the CPG space.
Winnipeg’s Brandish also launched an independent investment development arm called Brandish Ventures with a $1.5 million fund, while last year Zulu Alpha Kilo also acquired a stake in the natural skincare brand Consonant Skin + Care and acts as its in-house agency.
But Jackman said that its hybrid of management consultancy, with brand strategy and creative is what differentiates Catapult. “We’re as close to the end-to-end partner as you would ever find,” said Jackman. “Now with capital, not just financial but creative and strategic capital, you won’t find anything like us in the marketplace. No one’s put that together with a venture capital competency and chequebook.”