British digital-music firm Electric Jukebox has sprung a surprise this morning, claiming that it is in the process of closing a $14m funding round that will prepare the way for an IPO in the first half of 2018.
The claim came as the company unveiled its second hardware/software product, Roxi, which blends music-streaming with karaoke for families.
Roxi replaces Electric Jukebox’s first device, a combination of a plug-in TV stick, motion-sensing controller and music-streaming service, which was announced in October 2015 but finally launched in November 2016.
The company tells Music Ally that it is no longer manufacturing that first product, having sold out of its UK inventory in the first five weeks after the launch. “Roxi features new industrial design, new software, new electronics and a new licensing regime,” said the company’s spokesperson.
The device will cost £199/$199 and goes on sale today in the UK and US, with a year’s subscription included, before charging £52/$52 a year to continue it. Electric Jukebox is hoping that the funding round and 2018 IPO will help it launch the device elsewhere in the world.
Talking of those. The company says it is “closing its final tranche” of $14m in funding, with CEO Rob Lewis, former U2 manager Paul McGuinness, TomTom co-founder Mark Gretton and investment firm Yolo Leisure and Technology all confirmed as taking part.
The involvement of Yolo, which is a public company in the UK, means that there is more information available on the terms of Electric Jukebox’s funding.
A June announcement by Yolo revealed that Electric Jukebox’s parent company Magic Media Works had completed an issue of £1.2m of convertible loan notes, which will convert into ordinary shares at a 33% discount to the share price in any IPO.
What’s more, if an IPO doesn’t happen by the 1 December 2017 (not 2018) the loan notes will start accruing interest at 10% per annum. Yolo was in for £500k of the loan notes, giving it a just-over 41.4% holding in Magic Media Works.
As a small company in the UK, Electric Jukebox has not published financial results, nor has it revealed figures for sales of its initial device. An IPO would be expected to provide much more information of that nature for potential investors.
Attempts to go public don’t always go as planned, as Deezer can testify. Electric Jukebox’s surprising news this morning will see the company watched with renewed interest in the coming months.