After buying out his business partner, Mark Whitman spent 18 months scaling his content writing agency, aggressively expanding its services and client base.
He was preparing Contentellect for a future sale, but suddenly he found himself speeding up his timeline due to a major new wrinkle: artificial intelligence.
ChatGPT launched in November 2022, leading Whitman to wonder what the rise of AI would mean for his business model. At the time, he had assembled a roster of 40 freelance writers producing SEO content for 60 steady customers, and he feared that AI would threaten to replace them sooner or later.
“Technology was changing rapidly that was definitely going to disrupt our industry,” Whitman said. “When ChatGPT came out, I was like, ‘What is happening in this space?’”
He began to move faster toward a sale and in April 2023 reached a deal with Onfolio Holdings, a company that acquires online businesses from independent entrepreneurs. Onfolio paid $850,000 in cash – so the deal was about 1x his annual revenue of $900,000.
“I didn’t necessarily think AI would turn all of these content writing agencies into redundant business models, but we would have had to have pivoted our model,” Whitman recalled. “I had just spent 18 months building a massive team, and I just didn’t have the energy to do that. And I didn’t want to run an agency anyway.”
The life of a digital nomad building Contentellect
In a roundabout way, it was Covid-19 that led Whitman to buy out his business partner, but the story begins years before that.
Originally from Cape Town, South Africa, Whitman was a management consultant working in the corporate world in London when he read an influential book called “The 4-Hour Workweek” by Timothy Ferriss. That led him to start a series of online businesses while becoming a “digital nomad.”
He lived in places like Vietnam, Thailand and Mexico – “anywhere that was basically kind of cheap, where your dollars or euros went a lot further than Berlin or London or Paris or New York,” he recalled.
Working with affordable English-speaking freelance writers from South Africa, Whitman launched websites that produced affiliate marketing content for the adventure travel industry.
Once he learned how to create SEO content at scale, he started packaging it and selling it as a service to SaaS companies. Thus, Contentellect was born in 2018.
How Contentellect quadrupled revenue before selling
Whitman co-founded the agency with Marc Bromhall, a childhood friend he recruited to be Contentellect’s CEO while Whitman was an investor and advisor.
“I didn’t really want to run this business,” Whitman said. “I just wanted to launch it and get him to scale it, so that’s what we did for the first two and a half years.”
Eventually, Bromhall wanted to sell Contentellect and do something else.
Then Covid hit. Naturally, it put a huge dent in the adventure tourism industry, which Whitman had invested heavily in.
“I had quite a large exposure to the travel sector through affiliate marketing and lead generation businesses and so on, and obviously I took a massive hit in 2020,” he said.
So he pivoted to focusing on Contentellect, and bought out Bromhall in July 2021. “We agreed on a price, and that was that.”
Whitman, now living on the island of Guernsey between England and France, decided to scale the business in preparation for a sale. At that point, Contentellect was earning nearly $250,000 a year. He aimed to bring annual revenue up to $1 million.
Instead of marketing its content writing services solely to SaaS companies, Contentellect reached out to SEO agencies and digital companies in general. “We started offering our services to any online business that needs content or links,” he said.
He also broadened Contentellect’s offerings to include link building, journalist outreach, and bulk SEO content campaigns of 50 to 1,000 articles.
“I set myself a very fixed goal to grow the business quickly with the view of exiting,” he said. “I didn’t really want to run an agency for the rest of my life.”
Cue the entrance of Onfolio, which approached Whitman about buying the business, Whitman said. The deal closed in April 2023. Onfolio, which went public in 2022, has recently acquired a number of other businesses, including Proofread Anywhere.
At the time of the sale, Contentellect had 11 employees, 40 active freelancers, and about 60 active customers, a third of whom were on recurring plans.
Most importantly, Whitman had expanded Contentellect from nearly $250,000 in annual revenue to about $900,000. The company earned $340,000 of adjusted EBITDA in 2022. His biggest expense was his payroll and freelancers.
‘Most clients don’t want to use AI’
Onfolio’s CEO, Dominic Wells, isn’t as worried about artificial intelligence.
In a recent “Ask Me Anything” on LinkedIn about the acquisition of Contentellect, someone asked him, “How is it faring in the face of AI?”
Wells responded, “Most clients don’t want to use AI or the output isn’t good enough. Agencies that are struggling tended to run content farms. Also, it (Contentellect) has other services that are growing.”
As for Whitman, he took a break with his family and then got back to work, buying another company: Skyhook, an adventure travel booking platform.
“Because I can’t sit still for five minutes,” he joked.