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The fourth acquisition for AnyMind Group: An inside look into how the GROVE acquisition went down, and the future of influencer marketing.

AnyMind Group CEO 十河 x GROVE CEO 北島

In a press release on 8 January 2020, AnyMind Group announced the acquisition of GROVE Inc., a Japan-based influencer network.

This is the fourth acquisition for AnyMind Group since the company started operations in 2016. We spoke to the co-founder and CEO of AnyMind Group, Kosuke Sogo, and Junki Kitajima, CEO of GROVE Inc., as they shared more insight into what took place in the lead up to the acquisition.

Here’s a behind-the-scenes look at this acquisition.

Building Immediate chemistry from the first meeting

― Please tell us about the first interaction between AnyMind Group and GROVE.

Kitajima:At the very start, we received your contact from our website’s inquiry form, right? (laughs)

Sogo:Oh yeah, It’s better if I begin. When we initially rolled out our influencer marketing business in Japan, we researched related companies that had growth potential in the Japanese market, and we shortlisted 100 companies. Within the shortlist, we directly contacted 20 companies that we had a strong interest in, and GROVE was one of them. That’s why we requested an appointment from the inquiry form and managed to snag a meeting.

― So how was your first meeting like?

AnyMind Group and GROVE, CEO Sogo and CEO Kitajima meeting

Kitajima:I will never forget that. You lost your wallet and called a taxi straight away (laughs). You had reached a meeting room, but going outside immediately for a call?

Sogo:Yes, yes, I remember that! I entered the meeting room and realized I left it in the taxi. I immediately called the taxi from the room (laughs). I thought that it was an unlucky day, I lost my business card holder that morning as well.

Kitajima:What a first impression! Actually, it was not a bad thing at all. Because of this incident, I thought that this guy is a really straightforward and honest person and I felt that there is hope in humanity after all (laughs). It made a great first impression.

Despite being acquired by a public company before, they decided in that first meeting about the future direction to work together

― I see! It must be a very impressive first meeting (laughs). How was the feeling of the meeting?

Kitajima:Together with Yukino (COO of GROVE) who was also with me at the meeting, we immediately felt that we need to work with AnyMind Group. It was quite an impressive time!

Sogo:In fact, GROVE was a very attractive proposition for us, but before that first meeting, GROVE was not a high priority potential acquisition target. In fact, we met Grove at the very end from the shortlist!

Kitajima:Huh? That means we were in the lower levels of your shortlist, right? (Laughs)

AnyMind Group and GROVE, CEO Sogo and CEO Kitajima chat

Sogo:No, no, not like that! You were a top-class candidate! But you were recently acquired by Space Shower Network (SSNW), and internally there was an opinion that, “Grove is already big in Japan, is it better to give up?” However, based on our research you guys were a very attractive proposition, so I wanted to pursue this further.

― Mr. Kitajima had already decided right after the first meeting, actually, it is really surprising to have decided so quickly.

Sogo:I believe that the beginning is the most important part for a M&A. In fact, when the meeting started, I got to the main point immediately. I explained my vision and what we want to achieve, then straightly said that we want to work together and want Grove to join our group.

― So it was a straight offer by Sogo?

Sogo:Fortunately, I had already talked to a few companies, so I knew what various options were available, and I have a pretty good understanding of the industry.

Kitajima:It was just a one-hour meeting, but it was my most intense meeting of 2019. It was that good.

― Why was it so good?

Kitajima:AnyMind Group’s story and ambitions just matched GROVE’s urge to challenge. Although the relationship with SSNW was very good, there were still some ways to climb before we could generate bigger synergies with SSNW. I also felt that there was immediate synergy between both of our companies.

An unexpected response from Shareholders

AnyMind Group and GROVE, CEO Sogo and CEO Kitajima acquisition 2

Kitajima:After the meeting, we immediately reported to the founder and shareholders of GROVE, Mr. Morita, the founder, and SSNW. I told them frankly, “I want to team up with AnyMind Group!” I felt that it might not be the best timing, and expected a rejection, but SSNW respected my intention, and they told me “if this is the best decision for GROVE, we respect it.” I feel indebted to them for such a move. SSNW considered what was the best option for Grove to grow further and accepted the AnyMind Group taking the majority shareholding. I cannot thank them more for this decision.

― Again, intuitively, both of you had already decided, but what was the deciding factor of this deal?

Sogo:Honestly speaking, there are business-driven and creator-driven influencer marketing companies in this industry, and GROVE had a great balance between both. Amongst the companies that I had met, there were many cases where I had doubts over the business capabilities even though they have a lot of great creators, so that’s why GROVE was the best decision.

Kitajima:In that sense, GROVE is managed by COO, Yukino and myself. We’re able to split responsibilities well between both of us.As a former comedian, I truly understand that when we try to talk about business with influencers, they may put up a wall to us if it’s too formal. I am able to understand the influencer’s feelings and easily connect with them. Then I’ll leave the business side of things to my COO. This has brought a good balance for us.

We want to disrupt the influencer industry in Japan, which is dominated by a few companies. What does the future hold?

― I would like to ask Mr. Kitajima. What are your expectations in joining AnyMind Group?

AnyMind Group and GROVE, CEO Sogo and CEO Kitajima conversation

Kitajima:My priority has always been finding ways that we can bring more exposure and value to our influencers and creators, and that’s what will lead to business growth in this industry.

We hope that by joining the AnyMind Group, a company that has built beautiful synergy between technology and creators, we can commit more than ever to bring more growth to our influencers and creators.

Specifically, I believe that there is already great strength of people, including business and technology platforms in AnyMind Group.

I think there will be more growth for the top line.

And most of all, I want to disrupt the influencer industry in Japan which is dominated by a few players, with the combined strengths of AnyMind Group and GROVE.

― How about AnyMind Group’s strength in global expansion?

Kitajima:Of course, we are definitely interested in that. Southeast Asia is an interesting market, since it has a larger population than Japan, and there is a big population of young people.

As for me, the mass media and pop culture that I grew up with during the ages of 14 to 19 formed my personality, and that will shape future young generations as well.

I really want to responsibly deliver good information to the younger generation, and by expanding overseas, I would love to bring more people joy. From that point of view, a larger population is definitely appealing to me.

Taking on the entire influencer business in Japan The ambition of AnyMind Group’s Kosuke Sogo

― On the contrary, what kind of benefits do you think AnyMind Group can bring to GROVE? Also, as AnyMind Group, how do you want to further grow the business with GROVE?

Sogo:Mr. Kitajima also mentioned earlier, our strength is in the synergy between technology and influencer marketing business, and also overseas expansion.

As AnyMind Group, we want to take “all” of the influencer business.

At present, AnyMind Group has strong offerings in the marketing and advertising industry, and we definitely want to continue growing it. However, looking into the future, there is so much potential in the influencer and entertainment industry, and we’ll see influencers expand into e-commerce and other activities. This will increase the link between creators and their followers. With influencers as our starting point, we will continue to open up new value and opportunities in this industry.

“The GROVE perspective” the dilemma of Kitajima

― I would like to ask Mr. Kitajima, did you have any conflicting thoughts about this acquisition, as CEO of GROVE

Kitajima:From this perspective, I think there are two points that come to mind.

(1) Conflict over giving control to someone other than myself This did not occur to me at all. This is the best path for GROVE, it’s perfectly fine.

(2) Obligation or indebtedness to SSNW As I mentioned earlier, the relationship with SSNW is very good. There was no undue interference, and we received really well-rounded advice. That’s why I felt deeply indebted to them.

However, SSNW still owns 49% of the shares here, so we want to grow quickly and give back to SSNW as we grow. I really want to repay them for their kindness.

Take it step-by-step. That’s all.

― Do you have any concerns about this deal?

Kitajima:I have always been finding the way in the darkness, the anxiety is endless, but I’m confident we’re in the best direction now. If ever there are any doubts, I just look positively to the future and realize that the decision is a good one. I guess someday I can proudly say that meeting with Mr. Sogo was a fateful moment and I made the right decision.

This is how I feel more than anything else, and I will make it happen.

Sogo:In terms of AnyMind Group, we have good experience with acquisitions and have systems already in place, since it’s our fourth M&A, but what I want to focus on is building trust and collaboration.

We believe that synergy between companies is important to any acquisition, not only for the company’s management teams but also for employees. I really want the current GROVE staff feel “we are happy to join AnyMind Group!” We will move forward together, and that will lead to strong performances in the future.

There’s a lot to do, but we will take it step-by-step. That’s all.

Nobody knows what will happen ten years from now. Always be a step ahead of the times.

― How do you think influencers’ and creators’ will change over the next five to ten years? Also, how will the influencer marketing industry evolve because of this?

Sogo:We’re starting to accelerate into the era of “the individual”, which was started by influencers. There are currently various ways people can express themselves. It will not be just Instagram, YouTube, and TikTok, Their activities are going to be diversified “This person can be a YouTuber”, “this person has the potential to be good at e-commerce”, or “this person with a strong following on Twitter can open an online salon (a concept where individuals open up private chat forums on social media for their followers to consult or discuss with them about certain topics)”. In the future, the ways influencers and creators can express themselves and the possibilities that are open to them will be diversified even further. Since these are global platforms, it will be possible to collaborate across countries. For example, African dancers are trending right now, and there is no language barrier. I think there will be more ways for individuals to express themselves in the future.

Kitajima:We have basically the same opinion. Individuals will find more ways to express themselves, and long-form videos will remain mainstream for a while. I think there are two trends for video. 1. The content is interesting, which attracts viewers and transmits certain information 2. Connect with your fans through videos: Fans make it easy for an individual to move to the next stage of business. This has been proven time and time again.

It is now at the era of possible for a single person to easily entertain many people. With video becoming increasingly popular, there will be more opportunities for individuals to influence.

Sogo:Video for sure in the 5G era

Kitajima:By the way, can you imagine 10 years later?

Sogo: Nope, I don’t.

Kitajima:That’s right, we don’t really know what will happen. Rather than thinking ten years ahead, I think it’s better to look just a little further ahead – two or three years. 10 years ago, it was probably when the iPhone 3 came out, and ten years later, no one could have anticipated the growth of the mobile app industry!

Sogo:But who will take the first step? There is nothing that can continue to grow without any change. I always want to be a few steps ahead.

Dialogue with two CEOs. What’s next?

-What do you want to achieve in the future?

Sogo:Again, it’s all about how much we can cover the touchpoints of fans and the individual. We will continue to develop and provide platforms for individuals, such as collaboration opportunities with brands, developing merchandise, and providing opportunities for online expert forums or online salons. This way, we are able to demonstrate the strengths to what we are doing here on a global scale. We want to maximize our scale by offering the best products to each of our customers, and take advantage of the scale that we currently have, such as building a network of factories in Asia to deliver product sales.

Kitajima:Starting from influencers, we will move forward together with AnyMind Group in the direction of Sogo’s vision. I really want to create an entertainment powerhouse that covers businesses across various angles.

The most rewarding part of my entertainment-related work is how much it affects my life. I want to increase the amount of positive impact on the young generation. I believe in the power of entertainment from actual experience and I want to scale it.

“Make a change on the influencer business,” he said. I want our members to move forward with this motivation altogether.

― Finally, if you have a message for AnyMind Group and GROVE employees, please share it.

Sogo:We’re just at the start of building an influencer business powerhouse! We believe that through the vertical integration of our businesses, we can empower the growth for all everyone – stakeholders, marketers, influencers and creators.

Kitajima:I want everyone to realize that we have the potential to break the stronghold on the industry.

Sogo:I think we should have healthy competition in this fast-moving industry, and we are already in a position where we can create a big impact. I want you to know that we can realize this objective – it is now not just a far-fetched thought already.

I want everyone to move forward together with this motivation because I honestly think we can achieve it.

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