Seven years after it sold its stake in BMG to Bertelsmann for circa $1bn, KKR has made a meaningful move back into music.
The global investment giant is leading a $48m investment in Artlist, a royalty-free music and sound effects company that licenses content to creators on YouTube and other platforms. Israel-based Artlist, via its Artgrid product, also offers users a large catalog of stock footage (video clips).
KKR is primarily making the investment via its Next Generation Technology Growth Fund II. It is joined in the round by existing Artlist investor, Elephant Partners.
Artlist says it has licensed more than 20 million digital assets over the past four years, and that – across Artlist and Artgrid – it is used by over a million content creators and some of the world’s largest brands.
Artlist says that its top creators earn “hundreds of thousands of dollars”. It is now planning to quickly add tens of thousands of new and original stock digital assets to its platform, while also using the KKR cash influx to “expand into new adjacent categories both organically and via acquisitions”.
Artlist is a direct rival to the likes of Stockholm-based Epidemic Sound and Luxembourg-based Jamendo. Earlier this month, both of those companies inked a deal to supply copyright-free music to the media library of Adobe, best known for its creative software and stock images.
Royalty-free music for online video is becoming a booming business segment: research from Zenith suggests the average person will watch 100 minutes of online video content per day by 2021 in countries such as Canada, India, Mexico, the UK and the US. China and Sweden have already surpassed the milestone.
Artlist, whose users pay a monthly subscription to access its library, recently added Mike Weissman, President of SoundCloud, to its board.
“The investment allows us to accelerate growth and product development, and quickly add new content that is aimed to be the top tier of digital stock in the world,” said Ira Belsky, Artlist co-CEO and co-founder. “We want to cater to all content creators with every type of digital asset they might need.”
Artlist co-founder and co-CEO Itzik Elbaz commented: “We are excited to welcome KKR as a new investor and look forward to working alongside their team who bring decades of experience building leading global companies. KKR’s tech and media expertise, networks, and relevant prior investments such as Fotolia and BMG Rights Management provide added value.”
Patrick Devine, a member of KKR’s Next Generation Technology Growth investment team, said, “The growth of digital content creation – and the evolving way in which it is consumed – has generated a tremendous amount of opportunities for creators, but the process of licensing digital assets remains a significant challenge for small and large creators alike.
“What impresses us most about Artlist is the management team’s dedication to helping creators focus on what they do best and removing friction from the process of discovering and accessing content.”Music Business Worldwide
