Seven years after Wiggin set up IP technology company Incopro, it has raised $21m and expanded to protect more than 600 brands, Hamish McNicol reports
Simon Baggs, co-founder and chief executive of online brand protection provider Incopro, has a friend who designs and sells high-end rugs for tens of thousands of pounds. Within days of a visit to a trade fair in China, however, there were fake replicas of her product available on e-commerce giant Alibaba.com.
‘That’s incredible,’ he says. ‘You’d be surprised what sort of things are copied and it’s not just luxury products. We represent people who make ball bearings and drill bits – who’d have thought you can get fakes of those?’
Incopro was founded in 2012 as a separate entity to media law firm Wiggin, where Baggs is a litigation partner, with 13 equity partners stumping up more than £250,000 to get the company up and running. It has grown substantially since, now protecting more than 600 brands.
The company’s potential in what it claims to be a $1bn-plus online brand protection market, however, was most strongly signalled in mid-2018 when Incopro raised $21m from growth equity investor Highland Europe, one of the highest ever investments in UK legal tech. The money is to beef up both the product – expanding the development team from 20 at the time of investment to 60 by the end of this year – and sales and marketing, building on offices in the UK, US and China.
‘If you’re a brand or product maker then you need to ensure that the online marketplace is clean,’ Baggs says. ‘We process over ten million potential infringements a month. It’s not something you’re doing with an old-fashioned legal letter or by faxing a letter.’
A company experiencing 1,000 infringements might want to know about them all, but one facing a million infringements is likely more concerned about the primary problem area.
Baggs and co-founder Bret Boivin, previously at Warner Bros, established Incopro after working on a legal matter together. The initial concept was to use technology to scan the internet for websites that engaged in wholesale copyright infringement.
Montblanc owner Richemont was an early client, taking a site-blocking claim all the way to the Supreme Court, but the first three years were slow. The company was only scanning copyright infringing websites and licensing its technology to a relatively small pool of customers: film studios, record companies and corporates who used the website to track big piracy operators.
By 2015, however, Incopro had released its brand protection product, Talisman, from which the company took off. Revenue has doubled year on year since then (£3.9m to 31 December 2017 and recurring revenue at double that by the end of 2018) while staff numbers have grown from ten in the early years to more than 160.
Talisman uses machine learning to scan the internet for counterfeit products and brand abuse, including online marketplaces, websites, app stores and social media. But Baggs argues the technology’s main advantage is its network intelligence clustering technology, which aggregates infringement data to uncover large counterfeit networks.
A company experiencing 1,000 infringements might want to know about them all, but one facing a million infringements is likely more concerned about what the primary problem area is.
‘Someone selling fake football shirts on eBay, but only selling them as a one-off after going down to a market in China to buy one when they get an order, is obviously a different thing to a network of infringers who are selling thousands of them across 18 different marketplaces and social media,’ Baggs notes. ‘You need to unearth the real problems and not the small noise.’
‘We process over ten million infringements a month. It’s not something you’re doing with an old-fashioned legal letter or by faxing a letter.’
Simon Baggs, Incopro
The technology informs the relevant platform, for example, Facebook, when it finds infringing products, with the company boasting that infringements are typically removed within eight to 24 hours at a 99% success rate. Clients include the Reckitt Benckiser Group, Ted Baker, Durex, NBCUniversal Media and Harley-Davidson. Incopro is also used by other law firms. Baggs says 52% of Incopro customer wins in 2018 were from competitors and 48% from first-time buyers.
Highland was one of many venture capital firms that approached Incopro. Highland’s Sam Brooks and Gajan Rajanathan joined the company’s board alongside the $21m investment. Expansion is on the agenda, with offices in Los Angeles and New York opening post-investment and another in Japan possible, while the product is constantly being improved.
As well as adding 15 developers by year-end, a large proportion of Incopro’s 160 staff is made up of analysts: typically somebody with a legal qualification who works with companies to provide insight based on what the technology is finding. It also has 40 sales and marketing staff across the US, France, Germany, Italy and the UK.
Baggs says Incopro is also testing a new product, which can assess where brands are advertising and whether it is reaching the right people in the right context.
‘We basically release a new version of our product every month,’ he comments. ‘Brand protection to me is – although the most obvious example is fakes – about protecting the brand online and a broader understanding of that. Our ambitions are to enhance the technology, build in more features, but also broaden the product range.’
hamish.mcnicol@legalease.co.uk
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