DGTL Holdings is helping companies accelerate the Artificial Intelligence and Machine Learning (AI-ML) technological revolution – Proactive Investors…

DGTL which stands for Digital Growth Technologies and Licensing - specializes in accelerating fully commercialized enterprise-level SaaS (software-as-a-service) companies via a blend of unique capitalization structures

Artificial Intelligence and Machine Learning (AI-ML) technology is being used to disrupt many industry sectors driven by fast-moving innovation accelerated by the coronavirus pandemic.

The digital media and advertising industry has been one of the more obvious targets for AI-MI technology, and one company embracing the revolution is DGTL Holdings Inc. (TSX-V:DGTL, OTCQB:DGTHF)

DGTL which stands for Digital Growth Technologies and Licensing - specializes in accelerating fully commercialized enterprise-level SaaS (software-as-a-service) companies via a blend of unique capitalization structures.

The company also specializes in accelerating commercialized enterprise-level SaaS companies in the sectors of content, analytics and distribution via its wholly-owned subsidiary, Hashoff, with enterprise level self-service CaaS (content-as-a-service) built on proprietary AI-ML technology.

Hashoff's AI-ML platform functions as a full-service content management system, designed to empower global brands by identifying, optimizing, engaging, managing, and tracking top-ranked digital content publishers for localized brand marketing campaigns.

Hashoff is fully commercialized and currently serves numerous global brands by providing direct access to the global gig-economy of over 150 million freelance content creators. Hashoff's customer portfolio includes global brands in a range of key growth categories, including; DraftKings, Beam Suntory,

Anheuser Busch-InBev, Currency.com, Syneos Health, American Nurses Federation, Nestle, Post Holdings, Danone (OTCQX:DANOY) and Keurig-Dr. Pepper, The Container Store, Ulta Beauty (NASDAQ:ULTA), Pizza Hut, Live Nation, The CW, Scribd, and Novartis.

Proactive caught up with John David Belfontaine, DGTLs founder and EVP Corporate Development to find out more about the company.

Proactive: DGTL is looking to build a digital media, marketing and advertising technology portfolio. How is it achieving this?

John David Belfontaine: DGTLs investment model is to use M&A to build a portfolio of fully commercialized software companies that focus on the digital media marketing and advertising technology sector.

We created DGTL about three or four years ago using the TSX-V CPC program in a very unique and creative way. What we looked to do is to build a digital media house through merger and acquisition (M&A), acquiring fully commercialized business-to-business enterprise SaaS.

We are sector-specific in digital media, martech and adtech. And throughout the last year and a half, we have been interviewing software companies for acquisition. We completed our first deal, as of June 2020, with the acquisition of Hashoff LLC.

We have since invested into Hashoff and created a version 2.0 which allows for the companys platform to be used on video-based applications as well as fully self-serve for scalability, and we've added six new customers to the portfolio.

In summary, we are sort of an asset management company with a hands-on management team looking to accelerate software companies by providing the tools - the technology, the capital, the customers, the resources - that these founders need to execute on a revenue growth plan.

Can you explain the recent developments of the Hashoff 2.0 software?

Yes, absolutely. This is an exciting project for DGTL, the first technical development of our flagship subsidiary which was done at the request of one of our largest customers, DraftKings.

As we all know, DraftKings is very forward-looking in mobile and social media and is a very innovative company. They needed to see that Hashoff had the capability to provide Content-as-a-Service for video-based social media applications such as TikTok, Youtube, Snapchat, etc.

So we were very honored to have signed DraftKings and we're excited to manage their campaign for the NCAA March Madness, as well as the PGA Masters, and most recently to help market their NFT sports collectible memorabilia product line.

Hashoff challenged us to evolve the software into this video-based applications and we answered the call quickly to create an RFP and got the software developed to a 2.0 version. We've since completed UHT testing, migrated our largest customers over, and will be beginning to market launch this 2.0 software into the marketplace to be a real leader in providing social media influencer content for both static image, text, and now also video-based social media applications.

Content-as-a-Service is being adopted by many global brands. Can you explain why this trend exists?

Yeah, I think there's a pervasive trend that began almost 10 years ago when we saw large global brands starting to migrate from traditional marketing over to digital media. The real inflection point happened in 2019 when mobile surpassed PC (personal computer) in time spent on a monthly consumption basis.

To give an idea of what a change this was to our society and the way that business is done globally, last time this happened television surpassed radio. So you can imagine how different our lives have been interacting in society and in business, in a video-based or screen-based format.

So Content-as-a-Service has now become a critical component for global brands to connect with their consumers in market, in real-time, and certainly, through the pervasive adoption of mobile, social communications and information sharing it has become the preferred way to market and to communicate with consumers for brands worldwide, regardless of the sector in which they operate.

The company has been signing a slew of contracts across may sectors and regions, what is the main focus?

So when we acquired Hashoff back in the late spring/summer of 2022, really their key accounts were retail-based. They had Anheuser Busch, ADI and Dunkin brands representing 60% to 70% of their revenue and we knew that we wanted to diversify their customer base quickly. Certainly during the pandemic, it was a critical time for us to add key accounts.

We have since done that, adding six or seven large accounts, most notably with DoorDash, Varitone, DraftKings - now our largest account - Syneos Health in the healthcare division, and Currency.com in the cryptocurrency division, as well as two major Asia Pacific-based contracts, which are driving our international expansion and growth from overseas brands.

So we're really excited about that as well. We see continued diversification and growth of all these new accounts with increased spending and budgets, moving us away from the retail-focused brands and into more innovative sectors and diversifying our customer base.

What does DGTLs management team bring to the company?

That is a great question. Were led by an operational team in the United States, operating from New York. Our CEO, Mike Rasik has 25-plus years in the digital media advertising space, and is part of the New York ad scene. He's a former senior vice president for agency partnerships and category strategy at Rocket Fuel, which was a large ad tech company in its day. He's got a wealth of experience, is a frequent speaker in the trade, and highly respected in the digital media ad tech culture. And we're really lucky to have him at the helm.

Also on the operational team in the United States, Charlie Thomas, managing director and chief strategy officer at Hashoff has 30-plus years in the digital media advertising business. He's got a real interesting story being a pioneer in the ad tech space with Time Warner AOL (NYSE:AOL), and was one of the first individuals to ever sell an ad online and created the digital media department for the company. He is also a former VP ad sales at Broadcast.com under Mark Cuban, helping to launch one of the most successful IPOs in adtech at the time, and was a regional vice president at Yahoo, sales strategy for Facebook the list goes on

So our operational team in the United States is very strong. We expect to add to that operational team through our prospective acquisition of Engagement Labs (TSX-V:EL) with some very key talent for both front office and back office which will help to continue to help us grow over time.

But in Canada, we also have an impressive Capital Markets team headed by DavidBeck, former managing director TMT investment banking at RBC and behind three or four notable public companies in the technology space. During the 2000 tech boom, he was really one of the most respected research analysts in technology in Canada, issuing one of the first research reports on RIMM BlackBerry, so that's how far he goes back in that sector. So overall we have this nice balance of a US operating executive, as well as executive directors in Canada to help with corporate governance, etc. and stewarding the capital markets.

So what should investors expect from DGTL in the short to medium term?

We have just filed our audited annual financials and our Q1 interim financials which have reflected the shift in revenues away from retail. And we're really excited to see the continued diversification of our customer base with companies like DraftKings, etc. So I think that investors will be happy to see the continued growth of those accounts over the next one to two quarters.

We look forward to Hashoff continuing to grow but also to achieve being cashflow neutral/cashflow positive, which is one of our critical goals here for the next three to six months, to get Hashoff to be self-sustaining so we can continue to execute on our M&A strategy to build the portfolio in multiple categories.

We feel we have completed the Social Media Tech category for DGTL with our acquisition of Hashoff for content and our prospective acquisition of Engagement Labs (TSX-V:EL)/Total Social, for analytics play, as well as a partnership with a company called Shuttle Rock, which allows us to provide content into commerce, turning social media posts into web ads for any screen-based format, which is really innovative at a zero capital expense. We think that's an excellent distribution play for us.

Were excited about these acquisitions but we're also looking to build a larger portfolio. We're not just focused on Social Media Tech, we want to be active in mobile, social, gaming, streaming, while hyper-focused on the high growth areas of digital media. We want to have set a flagpole in each one of those high-growth categories to build a full-service digital media house to capture more sales revenues from each of the global brand accounts.

This is really just the beginning for DGTL. We've been public for one year now; we've acquired and grown our first asset and have a transaction agreement with a secondary asset; we are approaching $10 million in top-line and revenue with the two first companies trading at less than one time sales for the combined entities, which is a great value proposition for investors. In the sector, we typically see five times price to sales, in a bear market, and DGTL is certainly trading at a majority discount to its sector peers. So we know we have that tailwind behind us from a shareholder perspective.

But we are also looking to see DGTL continue to announce new customers post the acquisition of Engagement Labs/Total Social, with the collaboration between key customers from Hashoff and Total Social being so complimentary and so geographically diverse. In this acquisition, we are adding $4 million-plus in revenue to the top line, a new CRO to the front office, a full-time CFO to the back office and further diversifying the customer base with key accounts like Netflix, Hulu, Progressive, MetLife, Audible and the NFL. The cross-sell opportunity is obvious, especially when considering Hashoff key accounts, like AB Inbev and Draftkings, which happen to be the two largest sponsors of the NFL. The magic of DGTL really occurs once we have multiple software companies under management to cross-sell.

We're going to continue to grow the company, grow our key assets, turn them from just revenue growth to cashflow neutral and positive, continue to execute on our M&A plan, and flesh out this greater portfolio model that we set out as our investment plan and vision over the last two or three years.

We're extremely excited. With the first year of audited annual financials and the majority of the Hashoff development costs behind us, we can grow Hashoff revenues, and reach cash flow positive in the near term, while continuing to add to the portfolio via M&A.

The DGTL story has just begun and continues to evolve as we add new accounts, acquire more software companies, and grow towards a leadership position in the space.

Contact the author at jon.hopkins@proactiveinvestors.com

More:

DGTL Holdings is helping companies accelerate the Artificial Intelligence and Machine Learning (AI-ML) technological revolution - Proactive Investors...