ePrize buys Chicago firm, adds tech jobs

Posted on January 20, 2012

Digital promotions agency ePrize, of Pleasant Ridge, is expected today to announce the acquisition of Chicago-based Cellit, in a move to boost growth by accelerating the use of mobile devices in contests, coupon promotions and consumer-loyalty campaigns.

Matt Wise, CEO of ePrize, says the Cellit purchase will help drive growth of 25% in ePrize revenue to around $70 million this year. ePrize expects to add 80 or 85 jobs this year, on top of 80 added in 2011, “and the vast majority of them are here in Detroit,” Wise says.

Cellit, a mobile marketing outfit launched in 2005, currently has 17 employees. David Wachs, its founder and president, will join ePrize as a senior vice president of mobile operations and general manager of Cellit, which is to combine office space with ePrize’s Chicago team later this year.

The ePrize-Cellit combination fits neatly into the digital growth strategy being pushed in Detroit by Quicken Loans founder Dan Gilbert and a growing cluster of affiliated companies. Gilbert and several partners invested $32 million in ePrize in 2006. Josh Linkner, ePrize’s founder and former CEO, now heads Detroit Venture Partners, a Gilbert-backed fund that invests in early stage technology firms.

Ever since Gilbert announced in late 2007 that Quicken’s headquarters would relocate from Livonia to downtown Detroit, there has been speculation that ePrize would eventually move to Detroit, too. Wise says he’s watching with interest the growth of a technology corridor along Woodward Avenue in Detroit, but says ePrize will stay put in Pleasant Ridge for the immediate future.

When Linkner was rapidly building ePrize a half-dozen years ago, the firm invested lots of cash into converting an old brick structure into a quirky creative work space and expanding it for a staff of 400 people. After shrinking to 250 people during the economic slump of 2008-09, ePrize is just now approaching its pre-slump employment peak, so there has been no need for new headquarters space — not yet, anyway.

Wise isn’t saying how much ePrize is paying for Cellit, only that it’s a cash transaction, as was last summer’s purchase of the customer relationship management (CRM) division of Apollo Data Technologies, a Chicago-based predictive analytics firm.

“We’re seeing a dramatic change in our product set,” Wise says. “Whereas three years ago, 90% of ePrize revenue was from websites built for a contest or loyalty program, this year 35% will come from mobile applications and social networks. And we’re also adding analytics, social listening and media buying.”

ePrize already had created mobile applications for the Michigan Lottery, the National Hockey League and other clients, but Wise says having Cellit will triple ePrize’s mobile revenue as mobile components become part of 80% of all ePrize campaigns this year, up from 20% in 2011.

For a city and state where people are constantly bemoaning the loss of young talent and jobs to Chicago, Boston or Silicon Valley, it’s a welcome twist to see a Detroit outfit doing the growing and acquiring.

CORRECTION: In a column Thursday by Tom Walsh about ePrize’s acquisition of Cellit, it was incorrectly stated that ePrize had also purchased Apollo Data Technologies, of Chicago, last summer. EPrize did acquire Apollo’s customer relationship management (CRM) division, but not the entire company.