US-based TikTok rival Triller announced in the past 24 hours that it had completed a “substantial” pre-public financing round in the form of debt and equity.
Triller didn’t put a number on said financing, but the company’s CEO and Chairman, Mahi de Silva, did confirm that Triller had raised over USD $300 million to date.
There was, however, a wrinkle in Triller’s press release confirming its new raise. The company stated that it now “expects to become publicly traded on the Nasdaq under the ticker ILLR during the 4th quarter of this year”.
This appears to represent yet another delay in Triller’s planned IPO in the States.
That June announcement itself came shortly after Triller announced it was scrapping another planned IPO – this time via a merger with Seachange – which was initially expected to “close in Q1 2022”.
The bigger headache for Triller, though, is a new lawsuit from Sony Music Entertainment (SME), filed in the US yesterday (August 29).
It claims that Triller currently has no licensing agreement in place with Sony Music, the world’s second-largest record company.
According to the complaint, which you can read in full through here, SME is suing Triller for what it alleges to be “Triller’s willful and unauthorized use of Sony Music’s copyrighted sound recordings in Triller’s commercial social media service” plus “Triller’s failure and refusal to pay millions of dollars in contractual licensing fees that Triller agreed to pay for the use of Sony Music’s copyrighted content in Triller’s commercial service”.
The suit claims that Sony Music and Triller entered into a content distribution agreement in September, 2016, under which Sony authorized Triller (and its users) to reproduce, distribute and create derivative works of the major music company’s sound recordings, artwork, and metadata.
Triller paid Sony Music a “licensing fee and other consideration[s]” for this agreement. However, things then began to turn sour.
“While Triller had historically failed to make payments in a timely manner under the Agreement, its failures recently escalated,” reads Sony’s suit.
“Starting in March 2022, Triller failed to make any monthly payments required under the Agreement, totaling millions of dollars… After months of Sony Music requesting that Triller pay its outstanding and overdue fees, and near-total radio silence in response, Sony Music notified Triller on July 22, 2022 that it was in material breach of the Agreement.
“After Triller failed to substantively respond, much less cure, its breach of the Agreement by making payment, Sony Music terminated the Agreement on August 8, 2022.
“In doing so, Sony Music expressly informed Triller that its continued use of Sony Music Content would constitute willful copyright infringement.”
Sony claims that since it terminated its agreement with Triller on August 8, the video company has “continued to reproduce, distribute, publicly perform, display, create derivative works, and otherwise exploit the valuable Sony Music Content in connection with the Triller App”.
SME is seeking damages for both Triller’s alleged breach of the 2016 agreement, plus its “wilful infringement” of Sony’s copyrights since the August 8 contract termination.
Additionally, Sony is seeking an injunction to “stop Triller’s massive, willful, and deliberate campaign of infringement of Sony Music’s and [its artists’] valuable sound recordings”.
Sony’s complaint largely focuses on what it calls the “Eleventh Amendment” to its Triller deal, which it says was signed by both parties in December 2021 and was backdated to cover the use of Sony Music’s copyrights by Triller from December, 2020 onwards.
This, says Sony’s suit, “required Triller to make an initial payment due at execution, followed by payments due on the first day of each month from March 1, 2022 through November 1, 2022”.
It adds: “Collectively, the licensing fee covered Triller’s and its users’ exploitation of Sony Music’s Content under the Agreement for the period of December 1, 2020 through November 30, 2022, totaling millions of dollars.
“To date, Triller has not paid any of the monthly payments due under the Eleventh Amendment.”
“Collectively, the licensing fee covered Triller’s and its users’ exploitation of Sony Music’s Content under the Agreement for the period of December 1, 2020 through November 30, 2022, totaling millions of dollars. To date, Triller has not paid any of the monthly payments due under the Eleventh Amendment.”
Sony Music lawsuit
Sony’s legal complaint comes in the same month in which we learn that Triller is also being sued by superstar producers Timbaland and Swizz Beatz.
The duo are demanding $28 million in missing payments related to Triller’s acquisition of their song battle platform Verzuz in early 2021.
In the weeks leading up to the signing of that agreement, however, things weren’t quite so friendly: Universal accused Triller of having “shamefully withheld payments owed to our artists” as well as “refus[ing] to negotiate a license going forward”.
In response, Triller made the, ahem, surprising claim that it “[does] not need a deal with UMG to continue operating as it has been since [Universal’s] relevant artists are already shareholders or partners on Triller, and thus can authorize their usage directly”.
Universal didn’t agree – calling that claim “removed from reality”.
Participants in Triller’s latest funding round, announced yesterday, include Total Formation Co, an affiliate of Fubon Financial.
Other investors include Falcon Capital and Clearvue Partners.
“This was an important step for Triller to be properly funded entering the Public Markets,” said Mahi de Silva, CEO and Chairman of Triller, announcing the raise.
“We are very pleased to have such strong market leaders as investors and look forward to bringing Triller to the world via a Nasdaq listing,” he continued. “If the capital markets continue to be stable, we are targeting an early Q4 public listing.”
Triller also announced that it had concluded the acquisition of of Bare Knuckle Fight Championship (BKFC), a transaction it announced it had contracted earlier this year.
Added de Silva: “We want to thank our partners, investors and supporters whom to date have helped supercharge Triller from a startup in 2019 to a household name today, having raised over $300 million dollars, supporting over 750 million monthly interactions and over 300 million users across all of its platforms. We have only just begun.”Music Business Worldwide