A division of SoftBank has invested $1.6 billion into an e-commerce start-up’s new ‘influencer platform’
SoftBank Group founder, chairman and CEO Masayoshi Son announces his group’s earnings results on May 9, 2019, in Tokyo.
Alessandro Di Ciommo | NurPhoto | Getty Images
SB Management, a division of Japanese tech giant SoftBank, is set to invest $1.6 billion into a “yet-to-be-formed” technology division of British e-commerce start-up THG.
The deal, which was announced to THG shareholders on Monday, will give SBM 19.9% of THG Ingenuity. It values THG Ingenuity at $6.3 billion, which is roughly what parent firm THG was valued at when it floated on the London Stock Exchange last year.
Formerly known as The Hut Group, THG owns several online beauty and nutrition brands such as Lookfantastic, Mankind, and Myprotein. It also sells its e-commerce software to companies including Unilever.
Matthew Goulding, the billionaire founder of THG, described THG Ingenuity on a media call as a “social media influencer platform” to promote products, according to The Guardian. That includes brands sold by THG, as well as brands sold by other companies. Goulding added that SoftBank’s investment provides THG Ingenuity “with an unparalleled global growth opportunity.”
Founded in 2004 and headquartered at Manchester Airport, THG said in a statement: “THG Ingenuity is a yet-to-be-formed, THG owned and controlled subsidiary group, comprising the Ingenuity platform IP and operating trade and assets.”
It added: “To effect the SBM investment, THG Ingenuity will be required to be a separate legal entity capable of receiving the investment and this process has already commenced.”
In a bid to reassure investors, THG said “it believes that a separation of its key businesses will maximize shareholder value.”
A spokesperson for THG described Ingenuity as a platform that “powers” the company’s own brands, as well those of third-party clients. They said it specifically provides “digital services, including hosting, studio content, translation services and beauty product development and manufacturing.”
SoftBank to buy THG shares
SBM is also taking a $730 million stake in THG itself, which is raising $1 billion in fresh equity to fuel its worldwide expansion efforts.
The investment will give Masayoshi Son’s company, which has also invested in the likes of Uber, Slack and WeWork, roughly 10% of THG.
In 2020, THG’s sales soared more than 40% to £1.6 billion ($2.3 billion). However, it still recorded a pre-tax loss of £535 million.
The company also announced Monday that it will acquire New Jersey-headquartered beauty product manufacturer Bentley Laboratories for $255 million. It said the acquisition will boost revenues by $77 million next year.
“The acquisition of Bentley materially increases our capability in beauty manufacturing and product development,” said Goulding.
Shares of THG, which is valued at around £6 billion, soared 14% on the back of the news to over £7 per share on Tuesday.
