Gushcloud acquired by South Korea’s Yello Digital Marketing

SINGAPORE — Despite the recent controversy surrounding its business practices, home-grown content marketing agency Gushcloud has been acquired by South Korea’s Yello Digital Marketing (YDM).

The four-year-old Gushcloud announced today (May 22) that YDM had taken a 65 per cent stake in the company but did not disclose the purchase price other than saying it was an eight-digit dollar amount. Gushcloud will retain its name and branding while founders Vincent Ha and Althea Lim will stay on as chief executive officer and chief revenue officer, respectively. 

They will look into the South Korean company’s expansion plans in South-east Asia for content and influencer marketing. After the acquisition, YDM will also move its Southeast Asian headquarters to Singapore, which will have up to 200 employees, including Gushcloud staff.

Gushcloud was at the centre of a public spat after local blogger Wendy Cheng, who goes by the handle Xiaxue, in March posted online a brief written by a Gushcloud employee for its influencers. The brief promised incentives — including cash, discounts on mobile phones and VIP invites to Singtel events — for its influencers if they drove new subscribers to Singtel’s Youth Plan by complaining about the services of M1 and StarHub. 

The smear campaign earned Singtel a stern warning from the Infocomm Development Authority this week after Singtel chief executive Chua Sock Koong publicly apologised to StarHub and M1 in March. The telco also terminated its relationship with Gushcloud, which apologised for its conduct.

In an interview today, Mr Ha said YDM was willing to look past the incident.

“Mr Lee Sang Seok, the CEO, has been very understanding. He told us that entrepreneurs make mistakes. He saw that we made changes to our processes and internal controls after the incident. But I think more importantly, he said that entrepreneurs need to grow and learn from these mistakes, and I think we have been very open about this with them.”

“They have been very supportive. We have been very thankful because they firmly believe in us. They said, ‘Vincent, this is a small speed bump,’” he added.

On the immediate plans after the acquisition, he said: “Now we will have more resources and we are able to grow a lot faster.  One of the big opportunities for us is that they will be supporting us not just in terms of financial resources to expand regionally, but also in terms of the opportunity to tap into the existing client base of all these Korean digital agencies.”

“We all know that South Korean brands are expanding rapidly in the region … So over the next few months, we will be collaborating with these sister companies to discover opportunities where we can serve these brands which are coming to Southeast Asia.”

Discussions for the takeover started last November, and the deal was signed on May 14, Mr Ha said.

In the press release issued by Gushcloud, Mr Lee said: “Singapore is a strategic base because of its location, its reputation as an established regional hub for businesses and the sophistication of its consumer markets. Through Gushcloud, we hope to tap the huge potential in content and data to meet our clients’ needs in the dynamic digital world.”

Gushcloud is the 17th acquisition for YDM, which has said it aims to acquire at least 20 marketing companies in the Asia-Pacific region this year. YDM parent company Yello Mobile last November raised US$100 million from Silicon Valley investment firm Formation 8 that gave it a valuation of US$1 billion.