Exclusive: Inside story of MyVoucherCodes.co.uk founder Mark Pearson’s £55m exit

Our Class of 2011 Young Gun Mark Pearson on wake-up calls, the importance of focus, and his plans to invest in the next big e-commerce start-ups

“A few years back the business was flying and I had this sense of invincibility. And it was a bad thing. I just thought everything I touched was going to be a success.”

Mark Pearson, the founder of MyVoucherCodes.co.uk, the parent company of which – Markco Media – was sold to Monitise in a deal valued at £55m in June 2014, is reflecting on the importance of focus.

“I branched out too far and was launching everything,” our 2011 haysmacintyre Top Gun recalls of the then Croydon-based business. Daily deals, price comparison and numerous other divisions, features, ventures were ensuring his ability to juggle was diminishing by the day.mark-pearson-youngguns

An important wake-up call

A wake-up call from an adviser who asked how Pearson’s projects were going made him realise some were months late, while others simply weren’t working. In denial initially, he insisted it would all “get there”.

“The best piece of advice I got given was ‘focus’.”

“But, you know, the best piece of advice I got given was ‘focus’. Those were the worst words I’ve heard in my life because I thought ‘that doesn’t sound very exciting’.”

The focus returned to the core voucher business, while Pearson didn’t entirely spurn all other interests. His drive to recruit talent and the fierce competition that faces technology companies trying to attract the best from the clutches of Google, Apple and Facebook, among others, led to running some hackathons.

The experience opened his eyes. “I just thought, ‘these are the people I want to spend my life with’ because on a Friday, after their day jobs, they code for fun!

“And they spend the whole weekend with hardly any sleep coding and developing. They’re the people who make the magic happen.”

With more than 100 showing up Pearson decided to run hackathons on a commercial basis because he doesn’t like wasting energy. Having experienced other events such as Angel Hack at Google Campus as a judge the “great stuff” that was being built went nowhere at the end of it.

Instead, Pearson organised his around matching techies with entrepreneurs who could do the market research, marketing and launch plans, with two-minute live demos at the end.

Focused on investments

This all led to Pearson consolidating the next stage of his entrepreneurial journey – backing new ventures. In April 2015 Pearson launched Fuel.Ventures focusing on super-early seed, seed and Series A investments in e-commerce ventures. “I look for smarter people, smarter than me, with the hungry passion to build great stuff,” he says.

“I look for smarter people, smarter than me, with the hungry passion to build great stuff.”

Mark Pearson MyVoucherCodesFor the past three or four years Pearson says his strike rate’s been pretty good with a 10-fold return on his investments to-date and better than the return he got from the money entrusted to a wealth manager. “I’m not a big fan of traditional banks,” he says. “I let them invest and the value died pretty quickly. And when I’d wanted a loan I had the door shut in my face.”

“I’m not a big fan of traditional banks. When I’d wanted a loan I had the door shut in my face.”

In contrast, investment appeals because if he fails, it’s down to his judgement. “Every single business decision is your decision. I love the power of that as an investor.”

As well as the fund, Pearson has launched a start-up incubator to “create, build and grow the next wave of disruptive and globally scalable UK tech businesses”.

In October last year he exited Newcastle-based Spotify ecosystem business Playlists.net. The company started by CEO Kieron Donoghue was acquired by WEA, the artists and label services company owned by industry giant Warner Music Group. “You need the exit event,” says Pearson, who invested £250,000 in a seed round alongside a handful of private backers in a £600,000 deal.

“I always say I wouldn’t have invested in Twitter. I’m not a high risk investor.”

Unlike most of the deals that pique his interest, however, Playlists.net has not generated huge revenues or profits. “I’m all about revenue and profit so it’s not usually the type of company I’d invest in. I always say I wouldn’t have invested in Twitter. I’m not a high risk investor.”

He dismisses some of the frothy valuations and recalls vividly the first dotcom boom and bust. “Everyone was spending crazy money and there was no real proven traction,” he says. “There are real customers, traction, money etc. now. But we do see crazy valuations.”

“There’s lots of people building, flipping and running for the hills with big bags of cash. I want to build something solid.”

Groupon was a great example, growing to $1bn in revenue at an incredible rate. Google’s offer of $6bn for the business was turned down for a company that had yet to turn a profit. “When you read through the documents they were spending £34 on a user. They were doing that not knowing the lifetime value or how long it takes to make a user profitable. There’s lots of people building, flipping and running for the hills with big bags of cash. I want to build something solid.”

Exiting to Monitise and future plans

When it came to Pearson’s own exit to Monitise, the process started many months before. Markco Media’s £6m acquisition of VouChaCha in 2011, which became the company’s mobile location-based player, helped to get the ball rolling.Mark Pearson-Trendsy

Conversations were had with Vodafone, but the mobile giant ultimately acquired Vouchercloud in 2012 despite Markco Media being substantially bigger. “So what did we do wrong?” he asks rhetorically. “They were considerably cheaper. Two years later our eyes went towards the US and comparisons with Groupon, but we weren’t a $1bn business.”

Pearson monitored WhaleShark Media (now rebranded as RetailMeNot), which had raised $150m, made numerous acquisitions and planned to be a serious player in the coupon space. It subsequently took total funds raised to $300m. Despite tentative conversations nothing transpired.

With two potential liquidity events fallen by the wayside – something that niggled Pearson somewhat – Markco Media invested in Last Second Tickets, the discounted tickets reseller started by Craig Massey. An initial £450,000 deal alongside Charlotte Street Capital was followed up with a further £1m in 2012, providing Markco Media with a discount business for ticketing, sport, events and attractions.

Recalling the sequence of events that led to the eventual deal with Monitise, Pearson recalls his chance meeting with Alastair Lukies, the founder of the AIM-listed mobile money specialist and a Growing Business Young Gun in 2007. “We were in multiple conversations. In my mind it was going to be telco, a big publisher or financial institution. I didn’t really consider Monitise but met him at an awards,” he says.

“His team then talked to our team. They were interested in a mobile, coupon business. We’ve got banking partners. The pieces of a puzzle began to fit.”

Talk eventually turned to a potential acquisition. With Monitise’s 350 partnerships with financial institutions worldwide and Markco Media’s relationship with EE, the deal looked a potential revenue winner, along with the fact both are London-based technology businesses.

“We signed the deal at 6am. It was the biggest anti-climax. I wanted a medal or trophy or something.”

“It took six months to get there with all the contracts. And when we announced it I’d been in a room for 48 hours. We signed the deal at 6am, just in time for RNS announcement. It was the biggest anti-climax. I wanted a medal or trophy or something,” he laughs.

What felt like the right opportunity continues to excite Pearson. “The vision is to put offers and discounts into smart data algorithms, which recommend offers perfectly matched to what you like to save you money. It’s a nice value added service.”

trendsy Mark Pearson


For Monitise the appeal of a young, agile team that understands the sector and is based in London and run independently with Pearson heading up the management team gives it another string to its bow. Pearson has dropped to working two days a week on the business while continuing to work five days in the office with his time spread between investee companies.

So what started so modestly with the non-technical entrepreneur oursourcing the first web build of MyVoucherCodes.co.uk to someone in Rotherham with his mum managing the admin and scaled adding a handful of techies to the virtual Yorkshire office and 30 sales people in Glasgow before creating a London base, ended with a very handsome exit.

“I used to be a chef [under Gordon Ramsay at Claridge’s] so got an office in Croydon and hired people,” he remembers of the scale-up period. “We moved sales people down from Glasgow and kept the Rotherham team. That was to get the model right and then replicate. We hired French, German and American staff. It was risk and rewards with different challenges in each country.

“I still want to do it bigger and better again. I’m confident I will. I need to focus.”

“Then we scaled out to Italy, Spain, the Netherlands. It felt really crazy. I hadn’t been to some of these countries and yet we were getting revenue there. But Croydon was too far south. Someone said you need to be based in London – work hard, play hard. We got an office here and the rest is history!”

And projects such as social product discovery app Trendsy, part of Fuel.Ventures, are the future. Final words? “I still want to do it bigger and better again. I’m confident I will. I need to focus.”


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