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ASX-listed Vinyl buys blockchain music startup Serenade in shares deal worth up to $2.3 million
- Sydney-based Serenade, a blockchain music platform, has been acquired by ASX-listed Vinyl Group for $800k in shares. Additionally, Vinyl bought the firm's UK subsidiary for $1, expanding Vinyl.com business in Europe. Serenade's founder, Max Shand, has been appointed CFO of the merged business and will be responsible for meeting sales targets. If the target is reached, Serenade shareholders may receive a further $1.5m in Vinyl shares. The deal is subject to a 12-month escrow. Vinyl purchased Serenade's UK subsidiary debt-free for $1.
- To earn the additional equity, the combined business must generate revenue of more than $4m and $500k in earnings before interest and tax (EBIT) within the next year. Serenade has produced digital collectibles for more than 200 music artists worldwide. Serenade raised $7m from investors in March 2022, including Powderfinger’s Bernard Fanning, actor Hugh Jackman, and former Afterpay boss David Hancock.
- Vinyl's CEO Josh Simons said, Serenade is a business with significant potential and through the acquisition, Vinyl aims to expand Serenade's offering to reach that potential. In the long run, it will allow Vinyl to expand its product offerings in physical and digital collectables while launching into additional markets.
- Furthermore, the Serenade acquisition comes after a string of other purchases made by Vinyl Group; including Funkified for $1.8m in cash and up to $700k in shares and acquisition of media trade title Mediaweek for $1m in scrip and cash 50:50 split. Vinyl also owns music credits database Jaxsta.
- Vinyl Group sees the acquisitions as a significant step towards doubling its revenue run rate to above $20 million by the end of FY2025. Vinyl recently raised $5.4 million in a fully underwritten accelerated Non-renounceable entitlement offer (ANREO) and is spending $2.3 million in cash on Mediaweek and Funkified.
- Serenade's founder Max Shand had previously worked as the first employee of Afterpay and has spent over four years working for the Australian payment and buy-now-pay-later giant. He subsequently cofounded the millennial angels syndicate Strangelove Investments.
- It has been announced that upon the merger, the blockchain start-up’s revenues will add around $2 million annually to Vinyl’s turnover. The acquisition may signal Vinyl’s move towards digital assets and broader tech offerings.
- Vinyl has revealed that much of its growth is organic, while the company reportedly said it may seek more working capital in H2.
- ASX-listed Vinyl Group's recent acquisitions include media trade title Mediaweek for $1m in a scrip-and-cash deal and Funkified for $1.8m in cash and up to $700k in shares. Vinyl also owns music credits database Jaxsta.
- Serenade, founded by Max Shand, launched near-field communication (NFC) collectibles, selling 12,000 units to superfans in H1 2024. The start-up has been in discussions to expand their offering beyond music to sport and other entertainment sectors.
- Josh Simons, CEO of Vinyl Group, has stated that the acquisition is a great way of expanding the company's technology offering. Trading of Vinyl shares at the ASX is up 2% to $0.10 cents as of the close of trading on 28 September 2021.
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