Dept has acquired digital creative firm Dogstudio as the agency group seeks to grow its capabilities in experiential design and Web3.
Dogstudio is known for creating virtual events including Tomorrowland’s virtual festival and Expo 2020 Dubai. Founded in Belgium in 2006, the COVID-19 pandemic was a catalyst for growth as the agency established itself in the digital event space.
It claims to have brought in $10.2 million in revenue in 2021 — double that of the prior year. And while physical events are slowly returning across the world, Dogstudio is seeing sustained demand for digital experiences that act as permanent content hubs for events.
It also pivoted into Web3 and metaverse projects, an area in which it is seeing a “crazy” amount of enquiries from clients, managing partner and chief revenue officer Nicolas Moies-Delval told Campaign US. This aligns with Dept’s focus on growing its Web3 capabilities, after it launched a dedicated metaverse practice in March.
Dogstudio is projected to post $12.5 million in revenue in 2022. It has 35 employees and offices in Belgium, the U.S., Mexico and The Netherlands. The studio has picked up several awards for its work, including 5 Webbys, 47 Awwwards and 41 FWAs.
The agency has received “numerous [expressions] of interest from various companies over the years”, according to partner and CEO/CCO Henry Daubrez. Dept felt like the right culture fit, he said.
“In the past the culture wasn't right for us because we felt like we [would be] joining a machine. The main reason we considered Dept is because we met people who were really human,” he said in an interview with Campaign.
The timing was right too, he said, as the agency felt it was “growing outside of the limits of what we knew”.
“We were born a local company and became more and more international. Growing showed us there was a lot we didn't know yet that we could learn from others. We are in a phase where we're ready to join more like-minded people,” he said.
Dogstudio sees the sale as an opportunity to “supercharge our business and feel more relevant,” Moies-Delval said. It already has a project in the pipeline on which it is collaborating with other Dept agencies. “From a financial standpoint, it's great, because it's generating a lot of opportunities between ourselves and the other teams,” Moies-Delval said.
For Dept, Dogstudio adds “top notch” expertise in digital customer experience, as well as two countries where the group didn’t have a footprint: Belgium and Mexico.
Dept CEO Dimi Albers said: “It's been a conscious decision for us to look for teams who sit in the heart of the digital customer experience. If you look at the past 18 months, with the addition of Basic and Hello Monday, it's very strategically thinking about how we deliver the absolute top quality of experiences that are being created in the industry.”
Dept and Dogstudio worked together before on projects such as an illustrated 3D experience forDe Bijenkorf.
Dogstudio will continue to operate under the leadership of Daubrez and Moies-Delval. Dept does not fully integrate acquisitions immediately, but focuses on where it makes strategic sense for clients.
“When it's valuable for clients and for people, then we integrate stuff. For the rest we don't because they have a unique culture, their business has grown enormously and it's also making a nice buck, so why would we change anything?” Albers said.
The companies did not share terms of the acquisition, but the deal was majority cash with a portion of shares rolled into the holding company, which Albers explained is “to make sure we're all invested in the future we have together.”
It is a similar deal structure to S4 Capital, but Albers said the share rollover is “significantly lower” than S4 Capital’s 50%, because “that’s basically an earnout.”
“We approach it differently. The entrepreneurs get a significantly bigger part in cash, which we think is fair, because they've worked damn hard for it. And they are here because they want to be here, not because they have to be here,” he explained.
Dogstudio is the 30th acquisition Dept has made in six years, and Albers claims it retained 85% of the founders who joined the business.
Dept is now eyeing acquisitions in APAC and LATAM.
Private equity firm Carlyle Group took out a major stake in Dept in 2019.
(This article first appeared on CampaignLive.com)