Glasgow-based smart mobile marketing agency, Digitonic, has sold a 10% stake to one of its biggest clients, valuing the firm at £10 million.

As part of the deal, new investors have committed to delivering $5 million in additional revenue for the firm over the next two years through expanding into the US market.

The deal follows several years of rapid expansion for Digitonic. Founded in 2011 by Grant Fraser and Iain Wilcox, the pair each invested £2,000 of their own money to buy laptops and settle the first payment for a small office in Glasgow.

In May 2014, a consortium of four London-based investment angels acquired a 10% share in the firm, valuing the business at just over £2 million.

Last year saw the company trademark ‘Smart mobile marketing’ and the purchase of a 2% stake in the firm by an experienced Edinburgh-based investor. This led to the valuation of the firm once again rising to £5 million in July of 2018.

Commenting on the deal, Fraser said that following years of sustained growth, the company is now ready to accelerate and expand.

“As a business we have grown via innovation and commercialisation and we are now at a point where we are ready to accelerate our growth,” he said. “While we are very proud of the fact that we have been able to grow without ever having to take a loan or give away substantial equity to fuel our sustained growth, this investment will enable us to rapidly grow the business.”

“The first external investment in 2014 was to fuel innovation around our core mobile messaging platforms, however, the business commercialised much faster than we had first anticipated, so this money still remains untouched,” Fraser added. “To have turned out initial £4,000 investment eight years ago into a business worth £10 million, while retaining in excess of 75% of the shares, is something Iain and myself are immensely proud of.”

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Fraser confirmed that Digitonic plans to open a new office in London later in 2019, as well as expanding its client base into international markets.

The firm is currently in the process of relocating to a larger office space in Glasgow city centre, with hopes of doubling its workforce from 20 to 40 over the next 18-months.