Songtradr’s IPO Hope Rides On Music’s ‘Golden Age’ Soompi
“These new verticals are opening up every day. Music touches all of our experiences, from walking into a store or listening to music in a commercial environment, to putting on a headset in a VR environment. »
Songtradr is in the middle of this burst of activity. Its primary source of revenue uses data and expertise to match brands, advertisers, and content creators with a specific piece of music for their needs.
Consider this column, for example. We could choose a piece of music based on mood (“epic”) and theme (“drama”) and genre (“R&B/soul”). Then we could narrow our choice further by naming a vocal style, featured instrument, and tempo. The Songtradr search engine will then offer hundreds of choices – we liked Stay with me by Stuart Moore – who we could then fire.
Therein lies another key service that Songtradr provides to parties looking for music. Music licensing has always been extremely complex, with publishing and performance copyrights often held separately. Although buying the back catalogs of top artists has helped consolidate these rights in some specific cases, this is not the norm and Songtradr helps its customers through this minefield.
The company, which has a host of high-profile backers including WiseTech’s Richard White, the family office of Trevor St Baker and institutions such as Perennial, Regal Funds Management, Aware Super and Argo, has seen its revenues more than double in 2021, from US$19.3 million in 2020, with gross profit up 400%.
Wiltshire, a former pub rocker turned record producer who started the business in 2014, wants to move faster.
It raised $50 million at a valuation of around $300 million last year shortly after making three quick acquisitions designed to expand Songtradr’s reach with brands (those deals included a creative music agency called MassiveMusic) and its ability to process the largest datasets on which it bases its music matching capabilities (it also purchased Tunefind, a music discovery service for TV, movies and games).
Plans for an IPO had been launched in August last year, with investment banks Goldman Sachs and Jarden on board to warm up investors. Market sources suggest that an ASX chart run is more likely in the second half of the year.
“There will inevitably be another fundraising, whether through an IPO or a private financing round to support an acquisition or multiple acquisitions. But at this point we will explore any opportunities that make sense,” says Wiltshire.
“The music industry is growing so rapidly that it fuels our need to accelerate and continue to use M&A as an accelerator.
Wiltshire has several pockets of growth it wants to explore, including the games sector, where the use of music comes with additional technical challenges. “We have a footprint there, but it’s small, and we’re expanding that space.”
There’s still a long way to go, but it also reflects on music’s potential to be part of the metaverse. “There will be both public domain and commercial environments in this metaverse, regardless. And every business environment will need to allow music.”