A new chapter for Catena Media

Like so many leading gambling affiliates, Catena Media is a business born of humble beginnings. Its founders, childhood friends Erik Bergman and Emil Thidell, kick-started the company from a basement in Thidell’s parents’ house where the pair worked around the clock to drive traffic with the help of just one employee.

That was until, in 2012, angel investment company Optimizer Invest spotted Catena Media’s potential and purchased a 50% stake in the embryonic company. One founder of Optimizer Invest, Henrik Persson Ekdahl, is currently the interim CEO of Catena Media, having worked with the super affiliate on an almost daily basis since its not-so-super days of 2012.

In the six years since, Catena has grown its headcount from three to 300, and is now listed on Nasdaq Stockholm as one of only two publicly listed gambling-focused lead generation businesses in the world, alongside its major competitor XLMedia, which trades on the London Stock Exchange.

Henrik Persson Ekdahl, interim CEO of Catena Media

Ekdahl, who has been acting CEO since the departure of erstwhile chief Robert Andersson in October, has been charged with identifying a permanent successor to lead Catena in its next period of rapid growth. And that successor has now been found in the shape of Per Hellberg, CEO of magazine subscription company Readly and former Nordic Gaming Group executive. But in speaking to Ekdahl, you get the sense he will miss the intensity of his time in the hot seat despite the fact he will return to Catena’s board of directors as the firm’s largest shareholder.

“I have been running the company as an interim [CEO] now for just over half a year since September and I truly enjoy it – it has been amazing,” Ekdahl tells EGR. “I have been with Catena since 2012, so it was a great opportunity for me to come in and put an even bigger stamp on the business from my end.”

Ekdahl has now achieved his primary objective: assessing more than 150 headhunted candidates from London and the Nordics before arriving at Hellberg, a person he knows well after Betsson acquired NordicBet in 2010. At the time, Ekdahl was the CEO of Betsson and Hellberg the CEO of Nordic Gaming Group.

A friendly face

“I was fortunate enough to get to know Per back in 2010,” reveals Ekdahl. “He used to run NordicBet, and I actually bought that company from him, so I’ve had the feeling of negotiating against him while being competitors and he drives a hard bargain – he is a tough cookie. We worked together in terms of building a new team and integrating the two businesses, so I got to see how he worked hands-on and he is a truly inspiring leader. He is very loyal and when he steps into the room you can understand why he’s held the positions that he’s had.”

Hellberg left the gambling industry in 2013 and has subsequently transformed Stockholm-headquartered Readly. The business is run on the same premise as Netflix, whereby customers pay a monthly fee of £7.99 to gain unlimited access to magazine downloads on desktop, tablet or mobile. As testament to his success at the helm, the company is preparing to list publicly alongside Catena on Nasdaq Stockholm at some point in the not-so-distant future.

Despite Hellberg’s half-decade absence from the fast-paced world of online gambling, Ekdahl has likened Readly to a lead generation business and thinks its journey from techy start-up to a potentially publicly-traded media powerhouse closely reflects the success of Catena.

Per Hellberg will become Catena Media’s CEO later this year

“Per has the gambling background, but for the past five years he was tasked with building up Readly, which is the same concept as Spotify,” says Ekdahl. “You can read anything on Readly and they are world leaders in that sector. The company has truly changed that space and is getting bigger and bigger.”

Hellberg built the business up digitally by getting the world’s biggest media and publishing houses on board before updating Readly’s marketing and revenue models. The company, which doesn’t own any magazines, built an online platform that drives traffic and when a user downloads content, Readly receives payment from the publishers.

“We have always kept in touch and said it would be so cool if we could do something together again, so when his name came up in the process, we were like ‘wow, finally we have something here’,” says Ekdahl. He adds that Hellberg’s experience in dealing with different cultures across the globe will be a vital attribute at Catena, where more than 30 nationalities make up the 180-strong workforce at its Malta headquarters.

“He is calm and collected and has experience in offices from New York to Asia, as well as experience with a lot of different workforces. It is super important for us to have someone with that background because we are a global international company,” adds Ekdahl.

A hopeless romantic

Hellberg is expected to take up the reins before the end of June and is in the process of moving to Malta on a permanent basis with his wife and two children from their home in the Swedish capital. Yet there was a point in the recruitment process when Ekdahl was beginning to doubt whether he would ever find a suitable successor from a candidate list of 150. His growing frustration was evident when he spoke to EGR before Hellberg had been headhunted.

“When I last spoke to you [EGR] in December I was quite down to be honest,” he reveals. “We had seen so many candidates and I was really starting to wonder if there was anyone out there. A lot of people wanted the job, that was never the problem, but I couldn’t go back to my management or the board and say ‘hey, this guy is great’, because, quite simply, I would have been lying.

“We knew exactly what we were looking for, and those people are not super easy to find,” he continues. “We wanted to find a person who has been working truly digital and globally, and preferably someone who has been in the lead generation business.

“Their experience didn’t have to be gambling or finance, but someone who understands how to measure and drive traffic. They had to have been working at really large corporations, but also in the start-up phase, to really understand what rolling up the sleeves and doing the shit work means.

“Once you come up with a list of people with that history, believe me, there isn’t too many out there.” His voiced frustrations were only temporary, though, and beneath Ekdahl’s concern over a lack of suitable successors there was a true sense of joy at being afforded this interim role for a longer period than initially planned at a company he loves. Every week, Ekdahl would pack a suitcase and leave his family at home in Marbella in the early hours of Sunday morning to spend almost a whole week in Malta before returning home again briefly the following Sunday evening. Rinse and repeat.

“I have truly enjoyed it but my family lives in Spain and we don’t have an office there,” he explains. “I would take my bag, hit the road and come back on Saturday night or Sunday and I’ve been doing that now for seven months. It’s not an issue for me – I don’t smoke or drink and I work out every day so that I can handle the pace, but even then it is not a viable long-term solution and it was never meant to be,” he adds.

“It was so important for me not to rush the appointment. I had to find the right person. I could have kept working for the next few months, but I knew that I didn’t want to hand over my baby to someone that I didn’t trust one hundred percent. It feels like giving your kid away and that is why we have taken our time.”

Time to move on

One person who did earn the trust of Ekdahl and his board of directors was Catena Media’s last permanent CEO, Robert Andersson. It was a shock to the industry to learn of Andersson’s immediate resignation in October 2017, especially as he had been responsible for a great degree of the firm’s rapid rise and aggressive growth strategy since 2015 when he first assumed the role.

Ekdahl, though, indicates that Andersson’s spell in charge was never going to last forever in an industry as fast-paced as the egaming affiliate sector, especially having achieved Catena’s primary objective at the time by listing on Nasdaq Stockholm.

The Swedish Financial Supervisory Authority approved the affiliate company’s trading registration on 31 August 2017, and Catena’s final day of trading on the Nasdaq First North Premier platform was 1 September 2017. One month later, Andersson was gone, with the Swede reportedly more at ease running a company of 150 people than a 300-strong public business with further growth in store.

And the next five years could see growth on an even larger scale than the previous five, with the firm set to launch a lead generation assault on the financial industry as it branches out beyond gaming. This strategy is already well underway following the £10m purchase in November of Malta-based brand Beyondbits Media Ltd, an online affiliate company focused on stocks and shares comparisons in the European markets of Germany, Austria and Switzerland. And it is Hellberg who will be tasked with growing this side of the business even further so that the Catena name resonates in the financial world just as it does in gambling.

With the firm dominating the egaming affiliate space along with XLMedia, and with Better Collective and Gambling.com Group as close competition, it raises some interesting questions as to why the board has chosen finance as its next frontier. Is it that commerce lends itself particularly well to the business of lead generation, or is Catena simply following the money on this one? It is likely to be a mixture of the two, and Ekdahl has made no bones whatsoever about publicly setting ambitious financial targets, with the firm aiming to hit EBITDA levels of £100m by 2020.

The financial frontier

But no company has ever made a success of itself by standing still, and Ekdahl’s Catena is all-in on this venture, setting up camp in London, a city the Swede describes as the “financial capital of the world” even in spite of Brexit, just as the diminutive Mediterranean island of Malta is for egaming.

“We have taken the decision to move the company into a new vertical of financial lead generation. We released an all-time high quarterly report in Q3 [a 61% jump annually totalling €17.3m for the three-month period] and so we have positioned our company to be the world’s biggest lead generator for online gambling.

Henrik Persson Ekdahl will return to Catena’s board of directors by the end of June

“That is what we want to create now in the financial industry. We are happy with what we have achieved in gambling, and there is a lot more to do, so we will still run extremely aggressively on gambling going forward,” he added.

M&A has been the key growth strategy for Catena since its inception, and the business shows no signs of altering a tried and tested recipe. As a result of a bonds restructuring in February, Ekdahl tells EGR that Hellberg and co. will have an acquisition war chest of almost €200m to play with going forward, a figure almost unimaginable in the gambling affiliate sector a decade ago. Catena has hired three people to work solely on scouting potential M&A targets, flying around the world to assess potential purchases before reporting back to Ekdahl and his team.

Recent purchases include Catena’s own record outlay of €26.5m for German-centric sports betting comparison site Baybets, where earn-out performance payments could reach upwards of €63.4m over the 24-month period from 1 December 2017, although Catena said a “reasonably expected scenario” would see earn-outs of €30.5m.

Leaving the comfort zone

There is also clear evidence of the Catena machine at work in the UK after the company forked out a comparatively paltry £1m for struggling football-focused social media and content website Squawka. Squawka has been a widely recognised brand among football fans for several years now, editorialising Opta data for its four million monthly users and pumping out content on Twitter with relentless regularity to upwards of 800,000 followers.

But despite employing approximately 35 editorial staff, the brand wasn’t able to monetise its content to a sustainable level, with its main source of income arriving in the form of sponsored advertising banners on its UK domain site. Catena acquired the assets in December 2017, and the transformation was as immediate as it was obvious.

Now, when users click through to the site, a blanket banner for bet365’s latest football promotion appears within a matter of seconds and pops up again each time a different section of the website is visited, while a revamped tips section is updated daily with ‘bet of the day’ suggestions and match previews focusing heavily on odds. The revamp, though, is still in its early stages, and with a majority of Squawka’s traffic arriving from Africa, it remains to be seen how many site visitors have a proclivity for sports betting. A recently signed content partnership with exchange operator Smarkets is likely to help.

Safety in numbers

The bulge of Catena’s bottom line has effectively given it a safety blanket with which to experiment. The affiliate knows what works and can return to form if necessary. But Squawka is the first site acquired by Catena under Ekdahl that won’t be transformed into a sole lead generational webpage. Instead, the focus will remain on content in the hope of driving traffic through the quality of the output and the strength of the brand.

“For the first time, we have bought a news site that we won’t try to convert into a lead gen site, as it will be about maintaining the standard of the content and using the traffic that they already have,” Ekdahl explains. “For me, it is an amazing purchase. We love the product, we love the brand name and we saw an opportunity there.”

Even if Squawka doesn’t turn into another cast-iron money-spinner, there will undoubtedly be other opportunities for Hellberg to pursue once he makes himself comfortable in the hot seat. Not only is there the foray into financials to get stuck into, but Catena is already reasonably well embedded in America’s gambling market after the $350k purchase of poker news and poker traffic tracking resource PokerScout.com, as well as the $15m acquisition of a number of US sites, including playnj.com and uspoker.com. Moreover, should the US Supreme Court overturn PASPA, then surely the sky’s the limit. Hellberg could be walking into worse jobs.