The Brandtech Group will use funds to disrupt industry with machine-generated content and artificial intelligence

Advertising start-up The Brandtech Group has been valued at $4bn after raising new funds that will be used to disrupt the traditional advertising industry using artificial intelligence to create marketing campaigns. 

Founded by former Havas chief executive David Jones, the group has raised $115mn from new investors including Fimalac, the French company that used to own Fitch, and NendoLabs, a venture capital firm, valuing the group at $4bn.

Existing investors including Mousse Partners and Bansk Group also backed the new fundraising. The Brandtech Group was launched in 2015 aiming to make marketing services better, faster and cheaper using technology, including machine-generated content and AI.

Advertising agencies such as WPP and Publicis are now investing hundreds of millions in developing AI services to offer to clients, which can dramatically reduce the cost and time taken to create advertising campaigns. However, the shift to using generative AI in particular threatens thousands of jobs in the industry, and investors in these companies are concerned over the impact on their businesses from its use.

On Wednesday, shares in Martin Sorrell’s S4 Capital dropped 15 per cent, valuing it at just £240mn, after it was forced to warn over revenues. Talking to the Financial Times, Jones said: “The mobile phone made everyone a creator — gen AI makes everyone an ad agency — that may not be very good news for traditional legacy agencies with 100,000 employees, but it’s going to be great for the world of marketing in general.”

The group has brought in former Lazard International chief executive Matthieu Bucaille as its chief financial officer, replacing Jean-Marc Antoni, who was also a founding partner of the group. The company said Antoni would retire and take a part-time advisory role from January 2025. The group will use the new funds to add scale and make further investments and acquisitions. The Brandtech Group has had an average annual organic growth rate of more than 20 per cent since its launch. Jones declined to say how much the latest fundraising would value the business at, although investors in the business indicated that the value was around $4bn.

Pencil, Brandtech’s generative AI platform, predicts performance and generates marketing assets such as videos and images. Typically, Pencil’s ads are 10 times faster, result in two times better performance and are 30-50 per cent cheaper, according to The Brandtech Group.

Jones said that its AI tools would also be rolled out to its influencer businesses, allowing them to create content much more cheaply and quickly. Advertising could also be targeted at individuals at mass scale using AI, he added.

Jones said: “Gen AI is going to profoundly change, not just every aspect of marketing, but the whole of business.”

The Brandtech Group has also invested in other technology companies, including Niantic, creator of Pokémon Go, and Pinterest.