Spotify offloads two thirds of its stake in DistroKid for $167m

0 Comments




Spotify has offered two thirds of its minority stake in US-based DIY distribution platform DistroKid.

That’s in accordance with SPOT’s Q3 2021 monetary replace, which, filed with the SEC right now (October 27), reveals that, on October 1, Spotify “completed the sale of two thirds of its equity interest in DistroKid, realizing a gain of €132 million”.

Spotify’s proceeds from this sale, says the submitting, amounted to €144 million (approx $167m at present change charges).

Spotify made a “passive minority investment” in DistroKid again in 2018, however didn’t disclose the dimensions of the funding on the time.

SPOT’s new filing reveals that its stake in Distrokid was value €16 million ($18.5m) in January 2020, which then elevated to €49 million ($57m) by January 2021.

By September 30, 2021, in accordance with the submitting, as first reported by Music Ally, Spotify’s stake was value rather more, at €205 million ($238m).

What brought about this speedy bump in worth?

Look no additional: In August this yr, DistroKid confirmed that it had accepted a brand new spherical of funding from Insight Partners, which valued its firm at a whopping USD $1.3 billion.

Remember: Spotify has simply offered a stake in DistroKid value $167 million, in an organization that’s itself now value $1.3 billion.

And the stake Spotify has offered makes up two-thirds of the authentic stake SPOT acquired in DistroKid in 2018.

All of this info mixed suggests the next:

  • Spotify’s complete stake in DistroKid was value round $223 million when it offered two-thirds of it on October 1;
  • That two-thirds chunk was value round 13% of DistroKid;
  • The complete stake Spotify acquired in DistroKid again in 2018 would have been value round 17% of the distribution agency;
  • Spotify’s remaining stake in DistroKid quantities to about 4% of the corporate, and is at present value (primarily based on that $1.3bn valuation) round USD $56 million.

(The above is all primarily based on present EUR-USD change charges, so please take it as approximate.)

DistroKid, based in 2013, has greater than 2 million artists on its platform utilizing “the tools and services that [the platform] provides”.

The firm estimates that it distributes greater than a 3rd of all new music globally, which ties into the revelation introduced in May that DistroKid now distributes over a million tracks to digital companies every month.

Back in September 2018, Spotify announced that independent artists could upload their music direct to the service, by way of Spotify for Artists.

When it acquired the minority stake in DistroKid, Spotify revealed that these artists would moreover be capable of ‘seamlessly distribute their music to other platforms through DistroKid’.

By July 2019, Spotify signalled a U-turn on its choice to turn into a music distributor, with the choice to end its Upload Beta Program for impartial artists.

Spotify printed its financial results for Q3 2021 right now (October 27), revealing that its international Premium Subscriber base grew to 172 million in the quarter (ended September 30).Music Business Worldwide

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Post