Patrick Bradley began his professional career as a lawyer in the City of London, before branching into media with Polygram, where he stewarded the release of movies such as 1994’s Four Weddings and a Funeral. After a stint at Universal Studios, Bradley joined Ingenious Ventures in 2000 alongside former industry colleague Patrick McKenna. The pair built a solid reputation investing in successes such as Simon Fuller’s 19 Management (of American Idol fame), video games producer Lionhead, and distributor Digital Rights Group.
On April 11 this year Bradley launched Station 12, a London-based VC firm hoping to raise $251m of capital linking media and technology. The average initial investment will be around $17m. Station 12, incidentally, gets its name from a British WWII intelligence post associated with Bletchley Park, the station that cracked the enigma code.
RH -What’s Station 12’s USP?
PB – If you look at what’s been happening over the last decade, what you see is vast inflows of money into the tech sectors because of all of these disruptive new technologies that are coming into play. And there’s a lot of money on both sides of the Atlantic supporting these types of businesses. Our theory is that there’s a tipping point right now, which is that tech is still disrupting, but a lot of these new platforms are established, and they’re displacing traditional platforms from the market. Just look at Amazon Prime Video, for example: they’re buying content. So we think there is this tech dividend which is washing over into media and the creative entertainments sector. And I can’t think of another player in the European market who’s doing what we’re doing. We are a specialist investor in the sector with a lot of tech. There’s no-one on the other side of the fence, so to speak.
RH – Could you give me an example of the sort of cross-pollination that inspired you to start Station 12?
PB – You’ve got all of this new technology in terms of distribution which has come into the market. So that could be a Netflix, or a National Theatre Live, a different type of content in analog form is now being pushed into a new business model, so that it’s being delivered through streaming or other means to consumers. Consumers have confidence the technology works, and they’re also confident that they can pay in safety through subscription or however they wish to pay. Now, those platforms, to maintain those users, are creating new content. So that’s part of our thesis. The other is that the size of the market – $460bn in Europe – is an absolutely huge market which crosses everything from marketing services, to content and even to gaming.
RH – Can you name any ideas that you’ve particularly warmed to since beginning Station 12?
PB – I won’t say names right now, but we’re really looking across what we would call in the U.K. the creative services industry. So we’re looking at television content production, live concerts and entertainment, and some technology plays which enhance the quality of content. We are looking right across the spectrum of media and entertainment.
RH – Are you looking at Britain first before venturing out across the continent?
PB – We’re spreading the net wide to begin with. The U.K. is obviously a huge component of media and entertainment in Europe, because it’s an essential hub in a global market. But the Nordics are very active, particularly in gaming; The Netherlands are strong on television formats; and Germany is a huge media market in its own right with companies such as Bertelsmann.
RH – In terms of risk-taking, do you think that Europe still lags behind the U.S., or is that a myth?
PB – For very early-stage companies, for startups and even that next stage of startups there’s probably quite a lot of capital available – especially in the U.K. through schemes such as EIS (Enterprise Investment Scheme; tax breaks for investments in small companies). Where Europe falls down – and this is a major part of what we hope to remedy – is, where is the growth capital? If you compare what is happening in the U.S. with what’s happening here, there are key pockets of follow-on capital in the States. That does not seem to be prevalent in Europe. We’re looking at businesses that have established themselves, are revenue-generating, and just need an injection of growth capital to take them to the next stage.
RH – Which tech/media crossovers have particularly excited you?
PB – One business we were involved in at Ingenious was digital theatre, where productions were filmed and then streamed to mobiles, laptops or even cinemas. And that has transformed theatre in terms of creating a new business model. So you’re not just going to the theatre, and then the set gets packed up and put away: here you’ve got technology creating a new business model, and allowing the theatres to go out to people who may not be able to come to London’s West End to see the production, but could see it in their own homes. Also, creators can export that content to an international audience. That’s a great example of how technology is complementing content.
RH – You have a lot of history in the media industry yourself. Do you feel that a lot of European venture capitalists don’t have that personal background, and look at too wide a remit?
PB – The name of the game is risk mitigation. You can mitigate risk in all sorts of ways: the way you structure an investment though due diligence etc. But one of the key ways is knowledge. You have to be a knowledgeable and connected investor to know what the risks are and to filter out the bad. What we’re beginning to see are funds that do actually offer what I would call operational value: they do have people who have worked operationally within the sector that they’re investing in. That’s very much what the Americans do. And having told you about my history at Ingenious and now Station 12, this is what we believe in.