The Commercial Growth Fund will work by offering ‘high growth potential companies’ access to Channel 4’s advertising inventory in exchange for equity stakes or revenue share arrangements.
French music streaming app Deezer is the first company signed up to the scheme. However, commercial director Jonathan Allan told Marketing Week that C4 is in advanced talks with three or four other brands and could sign contracts with up to 10 by the end of the year.
“Exposure to television audiences can have a dramatic effect on start-ups and second stage brands but many don’t have access to huge amounts of cash and miss out on TV to focus on cheaper search engine ads,” Allan said.
“We want to help them make that leap into TV and through the fund we are bringing an entrepreneurial diversity to our advertising that our rivals cannot match.”
Channel 4 previously launched an Indie Growth Fund to support independent production companies but Allan says the latest growth fund is new territory.
“This is like being a Dragon’s Den or venture capitalist fund for marketing as these are quite complex deals and involve setting serious sales targets,” he added.
“We will treat this like a cash investment as our air time is valuable and we won’t open this up to any brand. If a business can succeed off the back of C4 exposure we will stick with them and open them up to our contacts book to the creative industries.”
Channel 4 has returned to profitability after two years of deficit as revenues rose 3% (£30m) to £938m in 2014. Of this, advertising and sponsorship contributed £869m, up from £846m in 2013.
Earlier this month, Channel 4’s head of marketing James Walker told Marketing Week the brand would place a focus on provocative viral marketing.