Kobalt is already one of the most well-funded companies in the music-rights space, having raised £205m so far including $60m in 2015 and $89m in 2017. And that doesn’t include the separate Kobalt Capital managed fund, which reached a capacity of $600m in 2017. Now it seems the company is returning to investors seeking another injection of capital for its main Kobalt Music Group business.
MBW reported yesterday that KMG is raising “the largest funding round in its history”, which given that $89m round in 2017 suggests that the total this time could be north of $100m. Chairman and CEO Willard Ahdritz told the publication that one of the key reasons for the new raise is the continued growth of distributor and artist-services division AWAL, which he said is on course to generate $100m in revenues in Kobalt’s latest financial year.
In March 2018, Kobalt promised it would invest $150m and hire 100 more staff for AWAL, after consolidating its recordings business under that brand. Some rivals like to grumble about Kobalt’s funding deflecting questions about the underlying profitability of its business, and this news will spark more of that. But at a time when the value of music rights is high, and the distro/artist-services market is exciting, it’s no surprise to see Kobalt seeking the funds to capitalise.