Utopia Music is raising €300m in a Series C round. But what’s it building?

Utopia Music (Utopia Music AG) continues to be one of the most talked about and acquired startups in the modern music business – although not everyone understands exactly what it is building. build.

The Swiss-headquartered company’s repeated slogan is “fairness for all wages”, while it bills itself as “a Swiss Music fintech company”. Upgrading the music industry through clear, transparent and trusted data-driven solutions”.

Outside of the recent series of acquisitions, that statement seems to focus on Utopia’s Proprietary music monitoring platformsometimes referred to as ‘Utopia Open Platform’ (UOP).

UOP generates logs whenever tracks are shot/played on radio and other broadcasters around the world, as well as identifies plays across streaming platforms and imports metadata sheet music/song.

Industry sources suggest that Utopia is aiming to build a music data entry machine so comprehensive that PROs and major music companies will have no choice but to adopt/license the platform platform to process their own data in the future.

Such an outcome – depending on the licensing model – could cause Utopia to receive a small payout from nearly every music transaction globally.

Some remain unconvinced by that possibility. One music publishing veteran said: “One thing to say to the PROs is that you have better data than they do, and even your platform can remove the ‘black box’. “It’s a whole different matter to think that you can convince them all to unilaterally sign up for your platform and change their payouts.”

Others are more active. “The PROs showed they couldn’t be trusted to build the Global Repertory Database on their own a few years ago, when their business The project is completely blown up“A senior industry source said.

“The modern music business demands the transparency of a trusted global data source. If that ends up being built by a Swiss startup, so be it. “

Interestingly, the focus on building an “agnostic” data engine for the global music industry is not exactly how Utopia got its start.

In a year 2017 Bloomberg In the article, Utopia’s Swedish founder, Mattias Hjelmstedt, likened his startup, at the time, to “a new kind of record company”.

Bloomberg suggested that Utopia would “produce and book live performances as well as handle the logistics for the artist, such as flights, taxis, and hotel rooms” for talent contracted with the company. mine.

At the time, Hjelmstedt described Utopia as “a combination of record labels, publishers, and management companies that work with artists to downsize the value chain and use technology to expand their reach.” their approach in a transparent manner”.

However, in 2019, sources tell us that Utopia has sent out investment exchanges to speak to the power of the ‘Utopia Open Platform’ and even compare itself to one of the biggest names. by Big Tech.

Google makes sense with ALL web data,” the deck seems to have read. “Utopia makes sense for ALL music data.”

Utopia Music: Founder

In Mattias Hjelmstedt, Utopia has one of the more interesting founders currently working in the music industry.

Prior to launching Utopia in 2016, serial entrepreneur, at various points, join an expert team eSports (specializing in the Counter-Strike video game), as well as co-founded two popular media streaming startups in Scandinavia: Voddler and Magnesium.

Voddler, originally founded in 2005 and then relaunched in 2008/2009, is a VOD platform that some say is Sweden’s answer to Netflix. (Spotify Co-Founder Daniel Ek tried Voddler, but famous don’t rate it.)

Voddler raised over SEK 200 million in venture capital from partners like Nokia Growth Partners and Deseven, but after a series of heavy financial losses collapsed before the threat of bankruptcy in 2018. (The bankruptcy of Voddler Group AB was complete in March of this year, according to records in Sweden.)

Hjelmstedt also co-founded Magine, which launched in Sweden and Germany in 2013 as a cloud-based television platform that allows broadcasters to deliver live and time-varying content to users. After its debut, Magine was quickly dubbed as “Spotify for TV” by an enthusiastic technology media.

However, Magine’s consumer-oriented platform was discontinued in 2019, after a string annual loss At the company.

Magine continues to exist to this day as a B2B service, Magnesium Pro, which helps TV and video companies operate their consumer services through a SaaS platform. According to company filings in Sweden, Magine Holdings AB has continued to post annual losses for the past five fiscal years (FY 2016-2021, see below).

Clearly, Mattias Hjelmstedt is skilled at generating excitement for his tech-driven startups, both in the media and in the investment community.

And with Utopia Music, he’s built his biggest company by far – one that has acquired a bunch of popular music businesses over the past 12 months.

In the UK, these already include Music Sentric, The right groupand Absolute Label Service.

In the US, Utopia’s M&A targets include ROSTRQuincy Jones’ Musimapmore Lyric Financial – advance royalties to independent artists.

After the acquisition of Lyric Financial last October, Mattias Hjelmstedt boasted: “[Utopia is] driving the entire music industry by creating new revenue streams, consolidating data, reducing administrative costs, and providing a variety of deeply innovative and diverse services, while eliminating the As a result, barriers and advertising have slowed the industry down for too long.”

Currently, according to sources close to Utopia’s business, who remain anonymous to MBW, the company is looking to raise hundreds of millions of dollars in additional capital through a Series C investment round.

Utopia hopes this Series C will give it a multi-billion valuation.

Utopia Music: The Ambitious Series C

MBW sources have seen evidence that at least one investment agent is currently offering Utopia backers a “pre-Series C investment opportunity” at a 1.5 billion euros company valuation.

Utopia seems to be looking for a “Strong Institutional Investor” to lead the round ahead of this Series C.

However, this is just an appetizer. Entrée is Utopia’s planned Series C round later this year in which it is looking to raise €300 million.

MBW sources tell us that UBS has been appointed to deliver this Series C round with an estimate €2.5 billion to €2.7 billion pricing for Utopia.

Utopia apparently completed legal/financial due diligence with several financial institutions – including BearingPoint, PWC, UBS and others – prior to this Series C rally.

MBW sources confirm to us that Utopia has successfully raised 100 million euros in the past five and a half years

According to our sources, the “before Series C” information was sent by agents on behalf of Utopia, suggesting that the company has booked €109.6 million in revenue and 18.3 million euros gross profit in 2021.

Utopia is now clearly on the way for 163.6 million euros revenue and 47.5 million euros gross profit for 2022 and is also targeting that it will move EBITDA positive (with sales of more than half a billion euros) by 2023.

The company hopes to expand the scale “Nearly 800 million euros” in EBITDA we say in 2026.

To help you get through it again: According to MBW sources, Utopia is planning to turn Negative EBITDA company into one 800 million euros-active company EBITDA only in the next four years.

Utopia has grown more 650 employees so far, indicates MBW sources viewed data, after acquisition 13 music technologies company in the past 12 months.

Using the pre-Series C and Series C funding it is currently raising, Utopia clearly intends to acquire 13 years old and up than music technology companies on next 12 months.

(MBW reached out to Utopia for comment on these figures earlier today, but we have not received a response.)

Utopia Genesis Foundation, and experimenting with cryptocurrency

Utopia, remember, is now a six-year-old startup. And, as we nodded at the start of this article, like so many other startups, it was created along the way.

Just like many other startups, it has dipped its toe into the crypto world.

In 2020, Utopia Music AG established an affiliated company with a legally separate foundation, Utopia Genesis Foundation (UGF). UGF carries the brand name ‘Utopia’ like its eponymous company (see inset).

UGF intends to mint 100 million crypto tokens with an estimated market capitalization of $3.8 millionin which Utopia Music AG will receive 30 millionsfollow a White paper Released in April 2020.

This white paper suggests that Utopia Music AG will receive these tokens “as compensation for the creation and development of various applications purchased by the Foundation, but also as an impetus for further development of applications.” used on the Utopia Platform which will subsequently benefit the Foundation”.

Those tokens have been raised 2.5 million USD since they launched in December 2020. Now they are almost worthless.

Based on Coinbase Datathe $ UOP token launches in December 2020 at USD $0.326 per token, rising to the peak $0.540 in April 2021.

Today, however, that value has been flattened: it has a value $0.0058 per token, about 1/33 of its price at last year’s peak.

In one July 2021 Medium piece – the last to appear on the Utopia Genesis Foundation (UGF) account to date – UGF said: “The crypto assets in the industry will be paid for with our tokens, thus when transactions are made. our artist assets platform/volume increased, Our $UOP appreciates in value. “

That, obviously enough, is not how things have gone from there.

Source: CoinBase

Perhaps the most notable information on Utopia’s once-ambitious ambitions in the crypto space can be found in the job description posted by Utopia Music AG for Business Development Analyst in 2019. , that still exist online.

Advertisement, which appeared over a year before the launch of UGF’s $ UOP tokens in 2020, read: “To fund the development of [Utopia Online Platform]Utopia Music is conducting a Modern Security Token Offering (STO) in 2019.

“By partnering with the likes of PwC, IBM and Vice Media, Utopia is able to ensure the best execution in all aspects of the token sale, while also focusing on the development of the platform. .

“Just as importantly, Utopia has secured some significant traditional financing – and is on track to raise more – providing the company with the wings it needs to take off and get started. its publishing portfolio acquisition strategy.”

(The last few words are interesting, aren’t they?! Utopia is definitely Not interested in catalog buying these days, a company spokesperson told MBW in late 2021. Anyway, back to crypto…)

Today, officially Utopia Genesis Foundation defunct site and UGF not posted yet on his Twitter account since January this year.Worldwide music business

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