US music-streaming service Slacker Radio is being acquired by LiveXLive Media, in a deal that values the company at $50m.
LiveXLive has agreed to pay $44m in cash and $6m in stock for the service, which has 1.5 million monthly unique users including 400,000 paying subscribers. Slacker had raised $75.7m of funding since its Series A round in 2007, so as exits go, this isn’t one of the more lucrative examples.
The deal is part of a flurry of corporate activity for LiveXLive, which recently agreed to buy Snap Interactive, which makes a range of social apps, for $34m including $20.4m in cash.
The company, which has historically pitched itself as a “premium live-music streaming network”, has also been signing up a number of digital influencers, including former Vine star King Bach and YouTuber/Viner Amanda Cerny.
Now it’s buying Slacker, which has been a direct (albeit much smaller) rival for Pandora in the US. Financials revealed by LiveXLive outline the state of Slacker’s business: in 2016 it generated $36.7m of revenues while recording a net loss of $10.5m. At the end of June 2017, Slacker had total assets of $6.5m, but total liabilities of $24.4m.
How does its new owner’s business shape up? There are challenges, it’s fair to say. In its last fiscal year, which ended on 31 March 2017, LiveXLive generated $225k of revenues while recording a net loss of $14.2m. In the three months to the end of June, LiveXLive’s revenues were $276.2k, but it recorded a net loss of $2.8m, ending the quarter with total liabilities of just over $6m.
In its last full-year financials, LiveXLive’s auditors expressed “substantial doubt” about its ability to continue as a going concern.
In its latest filing, the company notes that “our management estimates that the current funds on hand will be sufficient to continue operations through September 30, 2017” with more funding required to continue beyond this point. Not to mention finding $44m in cash for the Slacker acquisition and another $20.4m in cash for the Snap deal.
LiveXLive has big ambitions. “As we establish the key components of our premium live music and music-related video network, we plan to execute all stages of a full network life-cycle, including aggregating, producing, directing, promoting, curating and distributing music and music-related video and live music ‘lifestyle’ content that we will distribute on our online platform,” explains its filing.
As good as that may sound, LiveXLive is relying on raising funding and/or a public offering registered with US financial regulator the SEC in June to deliver on this.