Proper, formerly Utopia, tells shareholders: We need $6.4m from you

Giorgio Trovato via Unsplash

A few weeks ago, Utopia Music said it was aiming for a “fresh start” with its rebrand to Proper Group – now it’s looking for €6 million (approx $6.4m) from its shareholders.

At the end of March, news broke that the Switzerland-born music company was planning to change its name to Proper Group, and asked its shareholders to vote on the change at its upcoming AGM on May 3, 2024.

The ‘Proper’ name is derived from the UK-based distributor Proper Music Group, which Utopia Music acquired in January 2022 when it expanded into physical and digital music distribution.

News of the rebrand to Proper Group arrived just two months after the appointment of Utopia’s latest CEO, Michael Stebler, who succeeded Alain Couttolenc, who was appointed CEO this past October.

In a letter sent by the Proper Group Board of Directors to shareholders on Wednesday (April 17), seen by MBW, the company noted that it held an investor call on Tuesday (April 16) outlining its performance in Q1.

On that same investor call, according to the letter, the company called on its shareholders to support a round of funding “in order to bring the company to profitability and sustainable growth”.

The letter reads: “We stated in the call that we are fundraising across several streams, and from you – the shareholder base – we need to raise €6 million.

“Any investment made will also be supplemented with the previously communicated C-round warrant, which provides the right to acquire one additional share at the price of €1.3 until June 30, 2027.”

“We trust that you recognize the importance of securing these funds to ensure the Proper Group team can capitalize on its latest successes and realize its full potential. We count on your continued support.”

Utopia/Proper Group letter to investors

In March, Billboard reported that Utopia had secured ‘around half of a Series C funding round’ which totaled more than €15 million. The report added that a second tranche of C-round funding was underway.

Elsewhere in the letter sent to shareholders on Wednesday, Proper Group/Utopia said that if it can “raise the full €6m, an additional €2m will be unlocked from the lead Investor Group on top of the €2.3m that has already been paid by the Investor Group in the second C-round installment”.

The letter continues: “With the additional funds we can demonstrate strength towards external investors and put the company and the shareholders in a better position to continue to build on the many milestones achieved in the first quarter.

“We trust that you recognize the importance of securing these funds to ensure the Proper Group team can capitalize on its latest successes and realize its full potential. We count on your continued support.”

News of the most recent leadership shakeup, rebrand, and fundraising followed an eventful 2023 for Utopia (now Proper Group).

In January last year, the company announced a major restructuring, which Utopia co-founder Mattias Hjelmstedt said at the time represented “an exciting next step in Utopia’s journey” and proved that his company was “optimizing for the future”.

The restructure saw Utopia’s long-time CEO, Markku Mäkeläinen, depart the firm, while Hjelmstedt assumed responsibility for the day-to-day running of the company.

At the time, Utopia was split into two distinct divisions: (i) ‘Music Services’ (including acquired businesses such as the UK-based trio of Sentric Music GroupAbsolute Label Services, and Proper, which it acquired in January 2022); and (ii) ‘Royalty Platform’, under which sat Utopia’s in-house tech platform.

Former Downtown executive Roberto Neri, who joined Utopia as its COO in 2021, was confirmed as the new CEO of Utopia’s ‘Music Services’ division.

On March 30, 2023, MBW broke the news that the company had sold music publishing platform Sentric to Believe – just one year after Sentric was itself acquired by Utopia.

On April 3, 2023, Neri confirmed he was leaving Utopia to become CEO of the new global publishing division of Believe. (Neri has since joined the UK’s Ivors Academy as CEO.)

The sale of Sentric marked the second time in 2023 that Utopia had offloaded a company that it previously acquired within the prior 18 months: In February, Utopia sold music industry directory/data platform, ROSTR, back to its founders Mark Williamson and Adam Watson.

At the time, Utopia was also reportedly being sued by US music technology company SourceAudio, with the latter firm accusing the former of reneging on an agreed acquisition deal.

Then, in May 2023, Utopia Music entered into a “long-term” £100 million-plus ($125m) contract with DP World, a multinational UAE-headquartered logistics company, to provide warehousing and logistics for physical music in the UK.

As part of the deal, Utopia announced that DP World would be fitting out a new warehouse in Bicester, in the UK, for its distribution unit, Utopia Distribution Services (UDS).

Utopia also acquired Cinram Novum in September 2022 through its UK-based Utopia Distribution Services unit. Utopia said at the time that the deal saved the UK company from insolvency and secured 300 jobs.

At the time of its acquisition, Cinram provided warehouse, fulfillment, distribution and business services to independent and major record labels including Universal Music Group and Sony Music Entertainment.

It also counted Cargo Records, PIAS, Elevation Sales, 88 Films, Sony Pictures, 101 Films, Fractured Visions, Screenbound, Trinity Creative Partnership, Morrisons and Sparkling Pine, as well as large retailers, and artists among its clients.

Utopia expanded into physical and digital music distribution in January 2022 when it acquired UK-based distributor Proper Music Group.

Utopia also acquired another UK-based distribution and services provider for independent artists and record labels, Absolute Label Services, in February 2022.

However, Absolute Label Services was also divested by Utopia, in July 2023, with Absolute Label Services’ original leadership team regaining ownership of the company, just 18 months after their business was acquired by Utopia Music.

Utopia also made headlines last year for other reasons. In July, Utopia Music made a round of layoffs, affecting 5% of the company’s 474 employees.

Those job cuts followed the announcement of widespread layoffs at Utopia in November 2022, in which it’s believed around 20% of the company’s workforce left their positions.

Another round of job cuts in April 2023 resulted in another 15% of the company’s staff departing.Music Business Worldwide

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