Social Commerce Group SE - logoBerlin-based Social Commerce Group SE (web site) began trading on the Xetra exchange in Germany last week under the ticker (99SC).

The tech-driven incubator invests in early stage companies that introduce digital technology to more traditional industries such as sales & merchandising, sports/entertainment, automotive, etc.
Social Commerce Group SE has made 3 primary investments to date which are: 43% ownership in 3D businesses and solutions (Staramba.com), 55% ownership in augmented/mixed reality marketing solutions (MXM Mixed Reality Marketing AG) and 58% ownership in social games, tools & apps for smart social web solutions (yoyo AG).

Through ownership in these subsidiaries, Social Commerce Group offers software application development, sports stars merchandising, 3D printing, and online portal operation services. The company was formerly known as Adiantum Beteiligungen (Adiantum Investments) SE and changed its name to Social Commerce Group SE in March 2014. Social Commerce Group SE was founded in 2011.


 

See also: May 2015 Corporate Presentation (in English) and Prospectus (in German).


Of the three investments made to date, the 3D businesses and solutions (Staramba.com) is what I find the most exciting due to growth projections and (according to management) a possible spin-off IPO in the U.S. market.

According to the company’s guidance, the 3D solutions segment is projected to generate 3.48M euros (approx. $3.8M USD) in sales this year, with a strong sales trajectory as shown in the table below.

Social Commerce Group SE - estimates


Share Structure

Social Commerce Group SE has an extremely tight share structure with only 1.42M shares outstanding, approximately 19% of which, (or 269,800 shares), is the trading float.

 

Social Commerce Group SE share data


Staramba.com

Social Commerce Group SE - Staramba logoThe 3D printing branch of the company (Staramba.com) 3D prints high-end 3D figurines of sports, music, and entertainment stars, as well as social commerce group FB captureeveryday people that want a “mini-me” of themselves, or to memorialize a wedding, graduation, or other special event.

 

The company has engineered a proprietary 3D scanning hardware and software system that results in higher quality figurines while the printing is done with Projet 660 printers from 3D Systems.

Key customers include businesses, sports, music, and entertainment franchises that use the figurines in promotional and branding campaigns.

 

 Video: Gadget Inspectors visit Staramba (in German)

 


 

Exclusive Agreements in Place with Major Brands

Social Commerce Group SE partnershipsSocial Commerce Group has inked exclusive partnerships with brands such as Universal, Disney, Motown, and Marvel Enterprises according to the May 2015 investor presentation and the company has been in the German press (see Die Welt: Berlin Celebrity clones from the 3-D Printer). Press coverage to date in the U.S. has been minimal, but I think that will change based on my conversation with management (which I will highlight below).

Lady Gaga next?

As most 3D printing enthusiasts know, Lady Gaga is a fan of the technology (see Forbes: Lady Gaga Goes Gaga Over 3D Printing). Her French Bulldog, “Asia”, makes a 3D printed appearance on the contact page of Staramba and according to Social Commerce Group management, they are working closely with Lady Gaga now to develop the concepts she envisions in a 3D printed Lady Gaga, including multiple (and I assume, quite wild), outfits that would be available.

With 46 million twitter followers, @ladygaga could probably crash the servers at Staramba with a few keystrokes once here 3D printed version is available. 


Notes from my chat with management

I contacted Social Commerce Group and spoke with Sebastian Wolters, the Director of Corporate Development for the company and the interim CEO of Stramba.com during this rollout phase. Fortunately for me, Mr. Wolters is completely fluent in English.

I jotted down some notes during the conversation with Mr. Wolters, and will summarize them here:

  • Master contracts with Disney and Universal are in place
  • Staramba is launching a franchise model which is generating a lot of interest
  • They’ve been in LA for the last 7 months scanning stars for 3D printed versions that will be available soon
  • They’ve developed their own 3D scanning hardware/software suite that results in the highest quality 3D figurines and will be seeking IP protection of the technology
  • They will begin selling their proprietary 3D scanning system in June
  • Difference between Staramba 3D printed figures and others is in scanning and software suite. The high quality is what led to their partnerships with names like Disney, Marvel, Universal, etc.
  • Lady Gaga has been active in discussions re: concept and design for her 3D printed version (not yet available)
  • Plan a big presence in the U.S.
    Currently have offices in NYC (Staramba USA Corp. , 450 Seventh Avenue, 33rd Floor) and LA. Will announce a new East Coast- U.S. production and distribution center in coming weeks. Expect news flow in U.S. market to begin this summer
  • Eventual IPO in U.S. market of Staramba USA Corp. discussed and is probable

Conclusion

It will be interesting to see how the market values Social Commerce SE in coming weeks/months as more investors discover it. As of Friday’s close of 13.80 euros, ($15.19 USD), the market cap of $21M USD seems quite low given the many positives discussed above that will begin catching the attention of more investors. Where shares go over the longer term will depend on how close to the revenue and EBITA guidance the company has given. If they meet the guidance above, then I’d say there’s plenty of blue skies ahead for shareholders.


Graphene 3D Lab Inc. gary siig

 


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Disclosure: I am long shares of Social Commerce Group SE

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