Kobalt Music Group, a US-based music services provider backed by media group Hearst and internet technology conglomerate Alphabet, is in the process of raising a series E round, Music Business Worldwide has reported.
The company has approached investment banks to help raise the round, which is expected to be its largest to date sources told MBW. The company confirmed it is raising capital but did not reveal a prospective amount.
Founded in 2000, Kobalt provides services such as royalty collections, publishing, recording and neighbouring rights through dedicated units: Kobalt Music Publishing, Kobalt Neighbouring Rights, Awal and Amra.
Kobalt employs local experts and signs partnerships with local copyright and royalty collection societies, combining those efforts with technologies such as song fingerprinting and discography database analytics to ensure artists are properly remunerated for their work throughout international markets.
The company has reportedly raised $214m in equity funding to date and the series E capital will allow it to grow its market presence across all its existing verticals. It is particularly keen on accelerating the growth of its recorded music distribution and services platform Awal.
The new round would follow an $89m series D that closed in late 2017 when venture capital firm Section 32 added $14m to a $75m first tranche led by Hearst Entertainment, Hearst’s film production and distribution unit, earlier the same year.
The first close also featured VC firm Balderton Capital and MSD Capital, the family office of computer company Dell’s founder and chief executive Michael Dell.
GV, a corporate venturing subsidiary of Alphabet, had led a $60m series C round for Kobalt in 2015 that included MSD Capital and its hedge fund management affiliate MSDC Management.
Willard Ahdritz, founder and chief executive of Kobalt, told MBW: “We are building the leading centralised global technology platform to best service a fast-growing digital music industry.
“Streaming is driving an amazing shift in revenue distribution, creating a large new market segment of artists not being served by the major labels.”
