$1.4bn-valued Epidemic Sound grew its revenues by 49% in 2020, with a internet lack of $17.8m
MBW is getting used to writing about billions (and / or billions) of European music companies. Yesterday it was France’s Believe; today it’s Sweden’s epidemic sound.
Epidemic Sound, of course, has not always been the most popular unit among certain factions in the music industry. But it brings in significant sums of money – and new financial results the company released today (June 2nd) in Sweden have allowed us to reconsider the health of its finances.
According to Epidemic’s new annual financial report, sales in 2020 increased 49% year-over-year to SEK 575 million (approximately $ 69.5 million).
The same results also show that Epidemic Sound’s net loss last year was SEK 147 million ($ 17.8 million) – a decrease from its 2019 net loss of SEK 186 million ($ 22.5 million) .
The company’s operating EBITDA in 2020 was SEK 47.6 million (USD 5.7 million), roughly a third of the corresponding loss in 2019 (SEK 140.9 million).
Epidemic Sound’s latest results come just two months after closing a $ 450 million round of funding that included funds from investment giant Blackstone.
Through the investment, Blackstone Growth (BXG) teamed up with EQT Growth in the round, giving Epidemic a valuation of $ 1.4 billion.
Epidemic Sound’s existing investors prior to this round included Creandum and EQT Mid-Market and Atwater Capital.
Elsewhere in Epidemic Sound’s financial results, the company reports that its “Other External Costs” increased 15% to SEK 319 million ($ 38.6 million), compared to SEK 276 million (approximately $ 33.4 million) Million USD) in 2019.
This increase is due to the “long-term growth strategy”.
Epidemic also reports that its “staff costs” increased to SEK 318 million (US $ 38.5 million) in 2020 from SEK 263 million (US $ 31.8 million) in 2019. with the pandemic outbreak ” .
In May last year, Epidemic Sound laid off nearly a fifth (19%) of its 419 employees worldwide, with co-founder and CEO Oscar Höglund Music Ally at the time saying the layoffs were part of a “realignment” of Epidemic Sound’s business model.
The company’s increased personnel costs in 2020 also follow what Epidemic now calls “successful recruiting of the majority of key people in management positions”.
Epidemic said it had 336 full-time employees at the end of 2020.
“2020 was the most transformative year in Epidemic Sound’s history.”
Oscar Höglund, epidemic tone
Oscar Höglund, Epidemic Sound’s co-founder and CEO, said in a statement: “2020 was the most transformative year in Epidemic Sound’s history.
“We accelerated to a fully digital business model and made several important adjustments. We’ve also added thousands of great new tracks to our world-class music catalog. “
Höglund added: “I am proud of our team for adapting so well and for helping make 2020 such a successful year.
“It is clear that the demand for restrictive music continues to grow and I couldn’t look to the future with more optimism.”
Last June, Epidemic Sound announced a contract to provide copyright-free music to Adobe’s media library, best known for its creative software and stock images.
Last year, Epidemic’s music was also heard over 1.5 billion times a day on YouTube. It also signed music licensing partnerships with technology companies like Canva, Getty, and Lightricks.
Epidemic Sound expanded into the US market in late 2019, appointing Kate Vale as its managing director in North America. Vale is the former Managing Director of Spotify in Australia and New Zealand (ANZ).
Epidemic’s business model consists of two tiers: (i) licensing its library of royalty-free production music to broadcasters, airlines and hotels; and (ii) generating license fees from this music via streaming services such as Spotify and YouTube and licensing on platforms such as Netflix and Twitch.
Epidemic acquires the rights to the music of its composers (both masters and publishers) in full through one-time upfront payments, but undertakes to pay 50% of the streaming revenue to the composers whose music it has purchased.
- All SEK-USD exchanges in the history above were made at the current exchange rates current
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