Kobalt is a music technology and services company that grants artists royalties and serves a platform for music production. The company consists of a variety of divisions, including the music publishing division, the Kobalt Neighboring Rights section, the recorded music division (AWAL), and the American Mechanical Rights Agency (AMRA), acquired in 2015, which allows singers to keep the copyright to their work. Clients include rapper A$AP Rocky, pop singers Alessia Cara and Dua Lipa, Macklemore, rock band the Red Hot Chilli Peppers, and many more incredibly successful singers and bands, showing the high demand for this business's services. Kobalt claims to deliver royalties to artists 1 year quicker than other methods. This startup is viewed extremely positively in the eyes of investors due to its software management system for digital content, which enables artists who purchase Kobalt’s services to effectively view user data and song performance across music streaming apps. The company champions the right of the artist--a right that is often forgotten in pursuit of additional income by other businesses in the music industry.
Another component of Kobalt is its investment advisory firm Kobalt Capital Limited (KCL), which manages two different investment funds, both of which specialize in property rights within the music industry. KCL has invested over $350 million through acquisitions and loans in various forms of music rights like copyright and neighboring rights.
Kobalt underwent its first round of formal funding in 2008, when Balderton Capital, Europe’s leading early-stage venture capital investor, backed the company for $16 million. Since 2008, a plethora of other major VC firms have joined the Kobalt investor team, such as Google Ventures (GV), the venture capital arm of Alphabet Inc., MSD Capital, Tower Equity, and Section 32. Additionally, Kobalt is also currently owned by institutional investors and corporations, namely Hearst Entertainment.
As of March 5th, 2019, Kobalt is undergoing another round of Stage D funding that reportedly tops $100 million, arriving only 1 year after the finalization of Kobalt’s latest stage of Stage D funding for $89 million from Heart Entertainment and Section 32, which increased the value of the company to around $800 million. Thus, while not confirmed, this investment round would be the largest in Kobalt company history. With the new funds, Kobalt is planning on growing each of the 4 main divisions worldwide by making the different services more highly publicized and as a result, hopefully more highly used. The source of this funding is unclear; however, CEO Willard Ahdritz did confirm that his firm will certainly receive the substantial funding.
Additionally, Kobalt is in discussions with investment banks to obtain even more funding, which could point to a possible IPO. Kobalt’s continuously growing revenues, especially in the AWAL division, which alone is speculated to contribute $100 million of the $500 million to Kobalt’s projected revenues for fiscal 2019, speaks to impressive growth among musicians and investor excitement about the startup’s unique business premise.