Epidemic Sound considers IPO by 2025 (report)

May 16, 2024 | blog

Stockholm-based music licensing platform

That’s based on a report by Reuters on Tuesday (May 14), citing sources acquainted with the matter. The firm reportedly expects to nominate advisors within the coming months to organize for the general public itemizing.

Epidemic Sound was final valued at $1.4 billion in a $450 million funding spherical in 2021 that noticed Blackstone Growth (BXG) and EQT Growth purchase stakes within the firm. The firm’s present traders earlier than the most recent spherical included Creandum and EQT Mid-Market, in addition to Atwater Capital.

Discussions about an IPO are at an early stage, and there’s no assure that one will happen, the sources mentioned. Epidemic Sound didn’t touch upon the information, and neither did its shareholders Blackstone and EQT.

Founded in 2009, Epidemic Sound offers royalty-free music and sound results to content material creators and types by a subscription mannequin. Its music library boasts over 40,000 tracks, and Epidemic Sound claims its music options in 2.5 billion every day views.

In 2023, its web gross sales grew 25% to SEK 1.477 billion ($139.3 million on the common trade charge for 2023), permitting the corporate to trim its working loss (loss earlier than curiosity and taxes) to SEK 486 million from SEK 492 million in 2022. Ruling out the results of depreciation, Epidemic would have seen an working revenue of SEK 25 million, it mentioned in its 2023 earnings report revealed in April.

An IPO may present Epidemic Sound with funds to gas its development. The firm may use the proceeds to roll out extra instruments resembling its AI-powered music discovery software, Soundmatch, which launched final 12 months. This software analyzes video content material and suggests appropriate soundtracks, saving creators time.

Following its 2019 South Korean growth, Epidemic Sound would possibly use IPO proceeds to enter new markets, or make strategic acquisitions. In 2022, the corporate acquired  impartial file label, A-P Records, increasing its presence within the temper music enviornment.

The information of Epidemic Sound’s potential IPO comes amid a wave of dealmaking within the music trade. Blackstone is poised to amass bowed out of the race.

EQT, one other investor in Epidemic Sound, is a part of a consortium searching for to purchase digital music distribution firm Believe, the one bidders left in that race after bowed out. The consortium that features EQT on March 8 mentioned it has “fully negotiated and signed binding agreements with shareholders representing 71.92% of Believe’s share capital.”

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