B2B digital music company 7digital still expects to reach ‘operational profitability’ by the end of June, but the company has just borrowed £500k from an (unnamed) UK-based lender, for use this year.
The 12-month loan, with an interest rate of 1.5% per month, “will be used by the company for working capital purposes” according to 7digital’s announcement. “This debt facility will support the Company’s growth with non-dilutive funding as it continues to make rapid progress towards operational profitability by the end of Q2 2020,” said chair Tamir Koch, the eMusic boss who joined 7digital’s board in mid-2019 after investing in the company.
In January this year, 7digital published a trading update claiming that after its financial troubles in 2018 it had “stabilised itself” by securing £2.1m of funding in September 2019, as well as an intended debt facility of £1m. On the latest £500k loan, Koch added: “7digital has signed multiple contracts in recent months and this facility provides additional financial flexibility to execute on our healthy pipeline of deals with companies and innovators seeking to capitalise on the growth in audio and music streaming.”