Patience and persistence have paid off for US-based music licensing marketplace Songtradr, founded by expat Australian songwriter and entrepreneur Paul Wiltshire, after raising US$70 million (A$106m) in a Series E after a 20-month hunt for investors.
That figure is well short of ambitions for a US$170m (A$235m at the time) raise at a US$500m valuation, flagged in March last year.
By the end of 2022, the business had trimmed its capital requirements to US$30-40 million at a US$370m valuation, before ramped them up again two months later in February this year, seeking US$67m after announcing it would buy listed UK music platform 7Digital for US$23 million (A$34m).
The good news is the Series E reportedly values Songtradr at US$530 million (A$807m), just a month after bolting on another M&A deal – the online record store and music community Bandcamp, acquired from Epic Games.
The terms and price of that deal were not disclosed, however, Epic has joined Songtradr’s cap table as investor in the Series E.
Also chipping in for a third time was Wisetech Global (ASX: WTC) founder and CEO Richard White, along with other existing investors Perennial Private Investments and Argo Investments (ASX:ARG). Last year Argo increased the value of its stake in Songtradr to $11.6 million at around $43.50 a share, up from $2.6 million at $26.60 a share in 2021.
Epic Games, parent company of Fortnite, surprised many in March 2022, when it acquired Bandcamp, a music marketplace for musicians to sell their music and retain 82% of the profits. But after losing a series of global legal battles it instigated against tech giants Apple and Google, Epic is now in its own world of pain, recently laying off 16% of its staff and offloading assets.
Bandcamp also been squeezed, and saw its headcount cut in half as its new ownerr took control, with more than 100 staff departing at the handover last month.
Songtradr said ahead of the acquisition that “based on its current financials, Bandcamp requires some adjustments”.
— Songtradr (@songtradr) October 5, 2023
It’s nearly 2.5 years since the music licensing marketplace, founded in 2014 after Paul Wiltshire relocated to Los Angeles, raised $66 million in a Series D at a US$300 million (A$400m) valuation. White, a former AC/DC guitar technician, backed that round alongside Australian institutional investors Regal, Aware Super, Perennial, Argo and Greencape. He previously invested in Songtradr’s US$30m series C in August 2020, along with Trevor St Baker.
Like White at Wisetech, Paul Wiltshire has built has business through a series of mergers and acquisitions, including the world’s largest creative music agency, MassiveMusic, in 2021. Other acquisitions over the last four years include Tunefind, Big Synch Music, Pretzel, sound design firm Song Zu, UK sync licensing venture Cuesongs, and AI metadata and music search company Musicube last year, along with 7Digital and Bandcamp in 2023. It also a stake in invested in ASX-listed music data company Jaxsta.
Songtradr bills itself as “the world’s largest B2B music company”, offering a marketplace for music buyers ranging from ad agencies, to streaming platforms, film, TV, and gaming companies. It now has offices in 17 cities across 12 countries as is social media platform TikTok’s “sound partner” for music licensing, also working with clients such as Disney, Netflix, Apple, Coca-Cola, Amazon and Google.