A passing of the guard took place last month when Robert Castle became CEO, a man who’s not shy about the growth ambitions in store, beginning with the fundamentals he knows best.
“A large part of my mission is to increase investor awareness, including complimentary acquisitions and fundraising,” he says when discussing the premise for DigitalTown’s new direction.
A St. Paul native and son of “lifelong 3M employees,” the UMN BA and UST MBA alumnus had initially cultivated his relationship with DigitalTown through his prior role a senior investment banker with Northland Capital Markets in Minneapolis.
Castle indicates that he’s “been involved in excess of 100 transactions totaling over $35b in M&A and corporate financings,” over his 12 years of cumulative investment banking experience between RBC, Piper Jaffray and Northland.
“I know a great opportunity when I see it and am excited to be here right now,” he says when asked what it feels like to make the transition from finance to tech. “I never knew which company it would be, but going back to the early days, I always had the vision to be where I am today.”
Founded in 1982 by former CEO and current Chairman Richard Pomije, the company began as Command Small Computer Learning Center, and over the next 30 years would change business lines and trade names innumerable times. The latest, DigitalTown, as it’s been known since 2007, began as a holding company for niche media assets and domain names.
What started with one — http://burnsvilleblaze.com — has grown into a portfolio of 23,000 unique domains representing 27,000 high school sports teams in areas like basketball, football or lacrosse. So far, the team pages have sat relatively static and stagnant, displaying the basics like sports scores and schedules, but Castle describes integrating distinct features, network effects, and hyperlocal ads to better capitalize on the [self reported] 31 million gross monthly hits.
“DigitalTown owns 99% of all high school spirit sites across the country and we’re just now getting to the time and place to flip some switches on.”
“We are going to redefine the high school connectivity experience,” he exclaims, pointing towards a partnerships with Daktronics and the NIAAA, through which DigitalTown has a conduit directly to High School athletic directors through a revenue sharing deal. Additionally, a fundraising/coupon angle is aimed at “mitigating the unfunded budget gap that many school districts and private schools face every year,” while introducing another revenue stream.
With a market cap between $14m – $20m, depending on how its interpreted, the stock doesn’t move much; although Pomije still owns 65% of the company, Castle believes he has the financial flexibility to build out and prove the model throughout the coming years.
“I’m assuming for all intents and purposes that we did zero revenue last year. While we don’t provide revenue estimates, a recent 3rd party calculation estimated that if we were able to generate approximately $10k of ad revenue on a site and we were able to sell on 21,000 sites, the potential revenue would be approximately $210 million per year. It’s a drastic difference from where we are right now, and definitely is going to involve some investment into people and technology. We will be taking a very deliberate look at complimentary acquisitions of human capital and existing technology assets…there are certainly local companies doing interesting things in the space that we’re watching.”