With nearly 30 years of technology experience, Fathom founder and CEO Gareth Dunlop had led the agency’s growth since its 2011 founding. Fathom served a roster of 50 clients with services that included strategic planning, research, UX and service design, UX training and mentorship.
Dunlop bootstrapped the company and reinvested its profits, he said. With a staff of 12 full-time employees and seven freelancers, the company earned about €1 million per year in revenue at the time of its acquisition — roughly US$1.22 million.
Fathom’s sale to Low&Behold was part of a larger merger strategy that brought together five U.K. and Ireland marketing and design agencies to form a “super agency,” according to a press release.
To form the group, Low&Behold also acquired development agency Upbeat Productions, brand agency Bugler Smith, marketing agency Liquorice, and social agency JC Social Media. Dunlop, who declined to provide a value for the transaction, said Fathom’s sale was part of Low&Behold’s “buy and build strategy.”
Fathom tapped into a specific need in the Irish market
Fathom’s clear sense of purpose and identity helped drive the company’s success, Dunlop said.
Prior to Fathom’s founding, the Irish market lacked dedicated UX and consumer experience (CX) design agencies, he explained. That gap in the market, as well as Dunlop’s experience and personal interest in these areas, encouraged him to start the business.
“We observed that many web agencies were doing some UX, but rarely doing detailed in-depth UX, and that there were many buyers in the market who wanted just enough UX to be able to tick a box,” Dunlop said.
“We were clear from our first day that we always remain a dedicated UX and CX agency, founded on data and insight-led design, and dedicated all day every day to helping clients meet their needs through its commercially focused implementation.”
Dunlop’s acquisition experience helped Fathom’s sale go smoothly
Dunlop and the Fathom team were prolific content marketers. The team developed hundreds of pieces of content — from articles to videos — to reach their customers, offering a wide range of educational materials and analysis on trends in UX design.
UX, or user experience design, is the process of creating products or services that provide useful and relevant experiences to users or customers. Designers learn how customers interact with a product and design it in a way that offers users a functional, high-quality and memorable experience.
Dunlop’s previous experience with selling a business helped him navigate Fathom’s sale, he explained. He used a marketplace that connected him to Fathom’s buyer, the marketing and advertising firm Low&Behold, which is based in Birmingham, England.
“It was my second time around the track so it was pretty much as I expected,” Dunlop said. “Once we had agreed the deal in principle, we just needed to work hard to get all the legal and due diligence through.”
Key takeaways for founders who are thinking about selling
Dunlop’s advice to other bootstrapped founders who are planning to sell a business? Don’t get hung up on the difference between growing to sell and growing to generate cash.
“While it’s different for organizations who take in external capital — which typically involve[s] a commitment to an exit event — when a business that has a small number of executive shareholders, they can get the best of both worlds,” he said. “My approach was always a combination of ‘build a brilliant business that attracts the best customers and staff to the team’ and ‘ensure that if the day comes that someone is interested in buying it, that it is in good shape to support that.’”
“When the chance to sell Fathom arose, I was a few months away from my 50th birthday,” Dunlop said. “It brought a clear question into view: When I’m 60, do I want to be two or three times as wealthy as I am now, or do I want to cash in on 25 years of hard work, and spend my 50s with my family, riding my bike more and traveling the world? That for me was the easiest business decision I’ve ever made.”
Dunlop remains Fathom’s CEO and serves as the chief digital officer for Low&Behold.