MSD Capital, L.P., the private investment firm of Dell computers founder Michael S. Dell, has made a significant growth capital investment in Kobalt Music Group.
MSD Capital’s commitment consists of a primary investment and also the acquisition of a stake from SPARK Ventures plc, a founding investor in Kobalt. A representative of MSD Capital will join Kobalt’s Board of Directors. Balderton Capital, the leading technology venture capital investor, has also increased its holding.
Michael S. Dell, Chairman and CEO of Dell Inc (pictured), said: “Kobalt is a music company backed by and built on innovative technology, and I am excited about MSD Capital’s investment in the company. In addition, I am pleased to be able to support the company through Dell Inc. as a strategic technology services partner. As the music industry moves to the forefront of demonstrating the transformative power of information technology, Dell Inc. is the preferred partner supporting the growth and success of its leading companies.”
Willard Ahdritz, Kobalt’s Founder and CEO, said: “We are delighted to welcome MSD Capital as an investor. The backing of such a highly-respected investment firm is a statement of confidence in the strength of our business model and our growth strategy. We continue to invest in the future of the music industry, and MSD Capital’s investment will assist Kobalt to continue its rapid growth.”
Kobalt says its revenue grew by nearly 40% in its most recent financial year, , with a client retention rate of over 98%.
In 2013, Kobalt represented writers on 25% of the top 10 singles in the US, and 40% of the top US albums. In the UK, Kobalt administered royalties for 28% of the top 10 singles, and 38% of the top albums.
Glenn Fuhrman and John Phelan, Managing Partners of MSD Capital, said: “We are thrilled to be partnering with Willard and the rest of Kobalt’s world-class management team, as well as with Kobalt’s existing investors.
“Kobalt is addressing an enormous market opportunity. Due to the digital revolution and the growth of online video and music streaming, the music industry is becoming increasingly complex. Today, a single hit song can have 500,000 separate income streams. Kobalt’s technology platform was built for this exciting new world. We look forward to supporting Kobalt as it expands its service offerings and continues its impressive performance.”Music Business Worldwide
