Music copyright trading platform Musicow Inc. has attracted a 200 billion won ($167.9 million) investment from Korea’s private equity firm STIC Investments Inc., which will become the third-largest shareholder of the startup. STIC will acquire 100 billion won worth of convertible bonds and invest the other 100 billion won in Musicow Asset, the Korean startup’s special purpose company responsible for song copyright management.
STIC has set Musicow’s value after the investment at 800 billion won. The copyright trading platform was selected as a pre-unicorn startup by the Ministry of SMEs and Startups of South Korea last July, with a corporate value of around 100 billion won.
The startup enables trading small fractions of music copyrights. It purchases claims to a portion of music copyright fees from copyright owners, such as composers, then sells the fractions to individual investors. The more the songs are played, the more copyright royalties the investors receive. The investors can even sell the fractions to others.
STIC has made the investment focusing on the startup’s creative business model and fast growth. The number of Musicow users soared from 10,000 in 2018 to more than 900,000 by the end of 2021. Cumulative transactions increased from 1 billion won to 300 billion won during the same period. Its annual sales last year hit 45 billion won, increasing 4.5 times from the previous year. Market watchers say the startup attracts Korea’s younger generations by facilitating small investments in music copyrights, which have relatively low volatility.
Founded in 2016, Musicow has received investments totaling 34 billion won until its Series C funding in June 2021. STIC’s injection will be used for new copyright purchases and global business expansion. The startup will set up a joint venture in the US with Korean conglomerate Hanwha Group in the first half of this year.
It has selected Mirae Asset Securities Co. for its initial public offering in 2023.
Write to Si-eun Park at seeker@hankyung.com
Jihyun Kim edited this article.
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