The investment will give SoftBank 23% of Axiata’s digital analytics and artificial intelligence (AI) unit, Axiata Digital Advertising (ADA)
Today, Malaysia’s Axiata Group has announced that Japanese conglomerate SoftBank is set to invest $60 million in their digital marketing unit ADA. The move will give SoftBank a 23% stake in the unit, which SoftBank says will become its core digital and data marketing partner in Asia.
“This alliance with ADA heralds a new theme in this growth strategy as it will enable us to deploy our digital marketing business outside Japan,” said SoftBank Representative Director and Chairman Ken Miyauchi.
Currently, ADA offers digital marketing services in nine markets in Asia, with ADA Chief Executive Srinivas Gattamneni suggesting that the SoftBank funds will be spent on developing big data platforms, AI, and automation for digital marketing and advertising in the region.
“Together with our existing Sumitomo partnership, we can expect this strategic alliance with SoftBank to further fuel ADA’s growth momentum within the region as it unlocks synergistic opportunities that will form one of the pillars to deliver on Axiata’s digital champion ambition,” said Datuk Izzaddin Idris, Axiata’s group CEO.
Axiata suggests that the business will grow to be worth $2 billion over the next five years. This would be incredible growth; based on the SoftBank deal, ADA’s current valuation is around $260 million. Nonetheless, according to Axiata the ADA unit has tripled its revenue since its launch three years ago, building up a clientele of over 1,300 businesses in South and Southeast Asia.
Gattamneni ascribed some of the company’s success to the coronavirus pandemic shifting the region’s enterprises to what he calls a “digital first” mindset, with ADA being well positioned to capitalise on this period of rapid digitalisation.
“More brands than ever today in Asia are turning to data analytics and AI to differentiate their products and services in the highly competitive digital marketing industry,” noted Izzaddinn. “With this added business and capital boost, we are better placed to develop AI models for precision targeting, invest in content analytics and establish data platforms to deliver insights and help businesses pivot for growth.”