The Birth of Pi

17 Feb,2015

 

As M&C Saatchi Direct & Digital becomes Pi Communications, following a change in ownership in its Mumbai operations, Rakhshin Patel and Sumantra Sengupta, managing director and CEO of the new company, give Pradyuman Maheshwari a lowdown on the changed set-up and their plans ahead.

 

We’ve heard about big multinational media superpowers gobbling up homegrown enterprises. But now, two seasoned ad professionals have bought out the media superpowers. How come?

You are turning this into a David and Goliath story, which it isn’t really. M&C Saatchi has always been steeped in entrepreneurial spirit, and supportive of entrepreneurs. In 2008, when we started out, they supported our fledgling ambitions, and partnered us as we grew. In fact, they have been supportive in such a way that their changed priorities didn’t ever limit our ambitions.

 

M&C Saatchi is not a small agency. It’s a well-known, trans-national advertising powerhouse. And they are not known to invest in ventures quite so easily…

As we mentioned earlier, M&C Saatchi is entrepreneur-centered. They have partnered with local professionals in many countries. It was the same here. We started with very little investment and managed to break even in the first year itself. Thereafter, our operations paid for themselves.

 

We also started out with a much smaller stake in the company, and part of our terms with M&C Saatchi was a gradual increase in our stake over time. Our first increase was in 2012. The next one has taken place now, and we are extremely happy we could fast-track that.

 

You’ve always had a stake, of course. But this is more than single-digit, loose change, isn’t it?

Thank god for friends and family!We believe in what we’ve built, and we’ll certainly recover it over time. Cycling to work is an option perhaps.

 

Digital agencies these days come with some fantastic valuations. And you are not doing just digital things, but also some big-data work. So can we assume that your stake runs into few hundred million dollars, ie in three-digit-figure crores?

We had a 40 per cent stake in the company. Yes we’re digital and we do analytical consultancy, but we haven’t yet invested in data analytics. So a three-digit valuation is way off the mark.

 

Didn’t M&C Saatchi also buy out February last year and ask them to control the company? Are they okay with this new situation? Also, another agency with Saatchi in its name, did a similar thing, not so long ago

M&C Saatchi bought a minority stake in February; it did not buy them out. This followed a strategy similar to what they’ve adopted in China. Their focus and operations in India and China are a bit different from each other, probably given that the markets are different. I think the ability to think differently in different markets really means that all is, indeed, right with them. And globally, the brand in many countries is co-operated, if not co-owned.

 

So how did it happen for you?

As we mentioned earlier, our terms of agreement with M&C Saatchi allowed us to increase our stake over time. We just grabbed the opportunity when it presented itself

 

Are your clients on-board with it?

Our clients have not only been supportive, they have been actively encouraging and enthusiastic about this development. Many of them have said that since they know our work well, it doesn’t really matter what we choose to call ourselves.

 

What about all the goodwill and global clients that the M&C Saatchi name would have attracted?

M&C Saatchi did not really have globally-aligned clients here. Since there was no opportunity, in the past seven years, to work on globally-aligned businesses, it’s not something that we would miss. When for goodwill, it is garnered by both the name of the company as well as the people who build it. In this market, we have made a substantial contribution to the goodwill that M&C Saatchi enjoys. And while the name has changed we, the people, and our passion for the work, haven’t. So a part of that goodwill will continue to be with us.

 

Digital and Direct shops in India are getting acquired. Will you take that route?

Now you’ve got us thinking! Give us a few months and maybe we will look around to see whom to acquire…

 

Ufff! One is obviously suggesting whether you would like to sell your equity to some large M&C Saatchi-like player in the future?

Yes, of course, we understood it, so was a joke. But seriously we are just savouring this moment of being majority owners and our focus would only be to grow the business exponentially. That’s our goal.

 

Does your buy out contract prevent you from doing that?

The company has been taken over by us. We are free to pursue any path that is in our best interest. But right now, we are not planning to either acquire or be acquired.

 

What’s next, in terms of growth?

A lot of the distance we cover, will be through collaborations. Analytics is currently a gap in our offerings. We are in talks with people with whom we can collaborate on that. We need to take quick strides in that direction.  Besides, our business need not be limited by geography. We do have clients in Delhi whom we manage from Mumbai. But it would be great if we could create a presence in other cities as well.

 

This interview first appeared in the dna of brands issue dated February 16, 2015

 

 

 

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