Yesterday (August 25) it was announced that US-based Spotify rival Napster is being acquired by UK-based virtual reality music company MelodyVR, which has staged virtual concerts for the likes of Post Malone, John Legend and Khalid.
As reported in the original story, the deal is worth $70m, comprised of $15m in cash, $11m in Melody VR stock and “assumption by MelodyVR of approximately $44m in payment obligations, primarily to various music industry entities”.
MelodyVR – which is listed on the London Stock Exchange’s AIM market, and which posted a £15m ($19m) net loss in calendar 2019 on revenues of £195k ($242k) – appears to have agreed to cover said payment obligations to record labels, music publishers etc.
The source of the $15m cash part of the the deal has now been cleared up.
According to a release published on the LSE yesterday, the money was raised via a share placement, with exact gross proceeds totalling $15.3m.
The Napster acquisition, which is expected to close in Q4 2020 is being described as a “landmark move”, with MelodyVR stating the combination of its platform with Napster will “establish the world’s first entertainment platform that spans immersive live performances and recorded music streaming”.Music Business Worldwide
