Live platform Fever secures $110m funding round
Live entertainment discovery platform Fever has reportedly generated a further US$110 million (€103m) in a new venture funding round, giving the company a valuation of $1.8 billion.
According to tech.eu, the funding round was led by Goldman Sachs and attracted investors such as Eurazeo, Convivialité Ventures, Goodwater Capital, Alignment Growth, Vitruvian Partners and Smash Capital, and will enable the firm to invest in new content opportunities.
Based in Madrid, Spain and New York, US, Fever is led by Spaniards Ignacio Bachiller Ströhlein, Alexandre Perez Casares and Francisco Hein, and raised $227m in a previous funding round 12 months ago.
The platform makes personalised recommendations for users to enjoy unique, in-person local experiences such as immersive exhibitions, interactive theatrical experiences and festivals.
The firm says it has doubled its turnover in the past year, with North America now comprising over 50% of its revenues
It also collaborates with event organisers to create new attractions through its Fever Originals series, including its Candlelight Concert series in London, which has showcased the music of Hans Zimmer, Taylor Swift and Coldplay, among others.
The firm says it has doubled its turnover in the past year, with North America now comprising over 50% of its revenues. It has expanded its international presence from three cities six years ago, to dozens of cities across Europe, America, Asia, and Oceania.
“Fever’s success is underpinned by smart technology, amazing partnerships, and dedicated creators – three factors which we believe will ensure its continued growth and expansion in the future,” said Stephen Kerns of Goldman Sachs Asset Management last year.
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88rising investor Atwater racks up $100m in funding
Atwater Capital, a media and entertainment-focused investment firm, has drawn funding from investment behemoths Goldman Sachs Petershill and KKR.
According to the company, the funding will increase the total backing of Atwater’s new Atwater Capital Fund I, LP to over $100 million.
Atwater’s portfolio includes 88rising, a US-based artist management company, record label and media brand focused on Asian and Asian American artists that hosts the Head in the Clouds festival in Los Angeles and now, Jakarta, Indonesia.
The firm is also a backer of Swedish royalty-free soundtrack provider Epidemic Sound, and wiip Productions, the independent studio behind TV shows such as Mare of Easttown and The Summer I Turned Pretty, among others.
Atwater was founded in 2017 by Vania Schlogel, who sits on the board of Epidemic Sound as a director. She previously served as its chairwoman from 2017 to January of this year, when she was succeeded by former Shazam boss Andrew Fisher.
“It is a hugely exciting time to be investing in media and entertainment, an asset class which is acyclical and buoyed by both digitisation and significant growth in global demand,” says Schlogel.
“We view the commitments from these two blue-chip financial institutions as a strong confirmation of [our] long-term vision”
“We are delighted to be able to partner with Goldman Sachs Petershill, a recognised leader in sponsoring and supporting private equity firms globally, alongside the world-class team at KKR, as we launch our inaugural fund. We view the anchor commitments from these two blue-chip financial institutions as a strong confirmation of the long-term vision that we have for the Atwater platform.”
Schlogel served as a former member of KKR’s Private Equity team from 2009 to 2014, specialising in the media sector. She is also known as the former chief investment officer of Roc Nation, and the CIO of another then-Jay-Z-owned company, TIDAL.
“We are delighted to invest with Vania and her team as they identify and back a group of extraordinary media and entertainment entrepreneurs,” says KKR partners Philipp Freise and Ted Oberwager.
Alisa Amarosa Wood, partner at KKR, adds: “This is the continuation of the great relationship we have built over many years of collaboration with Vania – from her time at KKR and beyond. She shares our values, our partnership-oriented approach, and we are truly thrilled to be investing alongside her in this new endeavour.”
Christian von Schimmelmann, co-head of Goldman Sachs Petershill, adds: “We have a history of partnering with successful private equity firms globally and are excited to welcome Atwater as a natural addition to the Goldman Sachs Petershill family.”
“We look forward to providing strategic support as Atwater builds upon its history of investing in groundbreaking people and the companies they operate.”
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Pollen drafts in Goldman Sachs in search for buyer
Music, travel and experiences start-up Pollen has reportedly drafted in Goldman Sachs as it seeks to find a buyer.
The report by Sky News says Pollen is working with the investment bank to secure new funding, with indicative bids due earlier this month, and has asked restructuring specialist Kroll to assist with the process, although it is suggested that Kroll’s involvement is limited to Pollen’s student travel division.
A spokesperson for Pollen declined to comment on the report.
Founded in 2014 by brothers Callum and Liam Negus-Fancey, London-headquartered Pollen has organised artist-curated weekenders such as a Bring Me The Horizon four-day festival in Malta, the Unruly Culture Splash Weekender in Croatia with Popcaan, Diplo’s Higher Ground festival in Cabo, Mexico and Justin Bieber & Friends in Las Vegas, US. Its latest collaboration, Green Light Gang with 50 Cent, is set for Malta from 22-26 September.
The company raised US$150 million in a Series C round in April, only to let over 150 members of staff go in the UK and US a month later.
“As part of closing our Series C round, we agreed on a new plan with our investors where we will continue to show strong growth while taking the business to profitability faster through greater focus and cutting our costs by 15%,” Callum Negus-Fancey told Music Business Worldwide.
“All shareholders are really supportive of our change in strategy and agree it’s the best way to succeed and create value in the current environment”
Pollen Presents head of partnerships Zeon Richards also departed the firm this summer “citing practices within the company which do not align with my ethics”.
A report by Sifted said that Pollen had missed its June payroll and was working to “secure new funding, potentially in the form of an acquisition”. Pollen described the payroll “mis-timing” was an “an isolated, one-off event”.
In a press release earlier this month, the firm announced it was “moving from being a venture-backed loss making technology company focused on topline growth to an experiences and entertainment company focused on sustainable profitability”.
“All shareholders are really supportive of our change in strategy and agree it’s the best way to succeed and create value in the current environment,” added the statement.
Pollen runs two offerings: Pollen Presents, which curates experiences for customers across travel, music, and more; and Pollen+ which partners with promoters and music festivals to offer customers who book through its platforms perks at events.
The company previously raised over $100m in venture capital funding from investors including Kindred, Northzone, Sienna Capital, Backed and Draper Spirit.
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Live entertainment platform Fever raises $227m
Live entertainment discovery platform Fever has raised $227 million in a funding round that values the company at more than $1 billion (€900m).
Led by Goldman Sachs, the round is said to be the largest ever for a live entertainment tech startup and attracted investors including Alignment Growth, Goodwater Capital and Smash Capital. Eurazeo and Vitruvian Partners have also participated through a secondary investment of an undisclosed amount.
Based in Madrid, Spain and New York, US, Fever is led by Spaniards Ignacio Bachiller Ströhlein, Alexandre Perez Casares, and Francisco Hein. The platform makes personalised recommendations for users to enjoy unique, in-person local experiences such as immersive exhibitions, interactive theatrical experiences and festivals. It also collaborates with event organisers to create new attractions through its Fever Originals series.
“Despite the challenges of the pandemic and the novelty of the metaverse, there has never been a better time for thrilling and well-curated IRL events”
“We’re proud of our role in empowering experience creators to deliver memorable real-life experiences to millions around the world seeking to share unique moments,” says Fever CEO Bachiller Ströhlein. “Despite the challenges of the pandemic and the novelty of the metaverse, there has never been a better time for thrilling and well-curated IRL [in real life] events. Fever and the amazing event creators who use our platform are well-placed to meet the zeitgeist.”
Fever, whose largest market is the US, has grown its revenues 10x since its last financing round in 2019 and has expanded its international presence from three cities five years ago, to over 60 cities across Europe, America, Asia, and Oceania.
“Fever’s ability to grow revenue ten-fold in the last two years demonstrates both the strength of its team and the enduring demand for real-life experiences,” says Stephen Kerns, MD in the growth equity business within Goldman Sachs Asset Management.
“Fever’s success is underpinned by smart technology, amazing partnerships, and dedicated creators –three factors which we believe will ensure its continued growth and expansion in the future. We are thrilled to support Fever’s team in its mission of making culture and entertainment more accessible across the world.”
Upcoming Fever Orginals include its Candlelight Concert series in London, showcasing the music of Hans Zimmer (Central Hall, Westminster, Taylor Swift (Butchers Hall) and Coldplay (Southwark Cathedral).
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Live music down 64% this year – but will rebound in 2021
The money generated by live music ticket sales and sponsorships has fallen 64% in 2020, with nearly US$18 billion having been wiped off the value of the international concert industry this year alone.
That’s according to the latest figures from auditing firm PricewaterhouseCoopers (PwC), whose new Global Entertainment & Media Outlook illustrates for the first time the economic devastation wrought by the novel coronavirus and subsequent restrictions on staging live events.
The Global Entertainment & Media Outlook 2020–2024 – whose forerunner, the pre-coronavirus Outlook 2019–2023, predicted average annual live music growth of 3.33% through 2023 – revises that figure down to 1.4% (2019–24) to reflect the impact of Covid-19.
In total, live music will generate a projected $10.4bn ($8.3bn ticket sales + $2.1bn sponsorship) in 2020 – down from nearly $29bn in 2019, and far short of the $30.4bn generated by recorded music this year, according to the report. The fall in live revenues has also helped wiped some $17bn off the value of the global music industry as a whole, as the chart below (which covers 2015–24) shows:
This year marks the first time since the great recording industry slump of the 2000s – when touring overtook physical sales as artists’ main source of revenue – that the recorded sector (including digital) has been worth more than live, reflecting continued strong growth in music streaming, particularly during the Covid-19 era.
Music streaming specifically is worth $20.4bn in 2020, with a predicted compound annual growth rate (CAGR) of 11.32% up to and including 2024.
The global concert industry’s revenues in 2022 will be $29.3bn – over $300m higher than in 2019
Recorded music isn’t the only sector to have done well out of lockdown. Where physical experiences, such as live music, cinema and theatre, have been particularly hard hit by the downturn, home entertainment is booming, according to PwC, with video games (as previously noted by IQ) and ‘over-the-top’ (OTT) video – ie Netflix and other video streaming services – the chief “beneficiaries” of the Covid-19 crisis.
In the UK alone, OTT video revenue has “surge[d] by 18.6% in 2020, to £1.6bn”, the report notes, while videogame consumption is up 9.7%. “Overall, the video games industry is forecast for 9% growth this year, amounting to £5.2bn, and by 2024 the sector will be worth £6.8bn at a CAGR of 7%,” it continues.
But it’s not all bad news for live. Far from it: The 2020–2024 Outlook shows that live music will rebound in 2021, with worldwide revenues growing by 82.6%, to over $19bn, as concerts resume.
Mark Maitland, PwC’s UK head of entertainment and media, says a similarly strong recovery is expected in 2021 for other industries reliant on “in-person” experiences.
“Parts of the media sector have been hit very hard by the Covid-19 pandemic, particularly in-person activities or those reliant on advertising revenue,” he explains. “This will drive a c. 7% decline in sector revenues in 2020, but in recent months we have already seen improving performance, and as such, we expect the sector revenues to return to 2019 levels in 2021.”
Looking further ahead, PwC’s numbers tally with previous predictions made by investment bank Goldman Sachs – another seasoned music industry observer – whose head of media and internet research, Lisa Yang, said at iFF last week she expects the live music industry’s recovery to be complete by 2022.
PwC forecasts “live music to bounce back immediately next year”
Similarly, the Outlook 2020–2024 shows global revenues of $29.3bn – over $300m higher than in 2019 – for the concert industry in 2022, with ticket sales having rebounded to $23.3bn, compared to $22.9bn in 2019.
Despite a ‘lost’ year in 2020, then, PwC’s analysts see consistent growth for live music in the years ahead, noting that even though the business has ground to a halt, M&A activity continues.
“With global live music revenue expected to grow at a 1.4% CAGR, despite disruption to the sector in 2020 as a result of the Covid-19 pandemic there is much to gain from having a broad-based live offering,” reads the report.
“Providing more venues reopen,” PwC UK forecasts “live music to bounce back immediately next year from its growth loss this year”.
Highlighting how live businesses have embraced technology to connect with fans during the concert shutdown (giving the recent virtual Wireless Connect festival as an example), Maitland notes that industries which have diversified into digital are the ones best placed to bounce back quickly after the coronavirus threat has passed.
“Some parts of the [entertainment] sector, such as gaming and OTT video, have been beneficiaries during the pandemic, and we expect these to continue to prosper, with many ‘lockdown habits’ continuing far beyond lockdown,” he explains.
“For sectors adversely affected by the pandemic, this has brought forward some of the digital disruption prophesied to come years later, and it has reinforced the digitisation of the industry. This is reflected in [the fact that] industries that are forecast to claw back their lost revenue are ones being driven by, or have embraced, technology as a way to connect with consumers.”
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Goldman Sachs: Live to return to pre-corona levels by 2022
Investment bank and research firm Goldman Sachs has forecast a strong rebound for the live industry in 2021, in its 2020 Music in the Air report.
In 2016, Goldman Sachs’ Music in the Air: Stairway to Heaven report predicted that the live industry would grow by US$14 billion by 2030, with the sector benefitting from a greater preference for experiences among millennials and Generation Z, as well as access to new tech and data to help boost ticket sales.
Now, the bank has released a second report, which gives revenue projections for the music industry – comprising live, recorded and publishing – in the wake of the coronavirus crisis. The report lowers its pre-pandemic forecast for the live industry by more than 75%, down to $7 billion, but predicts it will climb back to pre-Covid-19 levels within two years.
The report forecasts a “strong rebound in outer years”, predicting 26% revenue growth in 2021 and a further 18% increase in 2022
Lisa Yang, managing director of media and internet equity research at Goldman, says that up to 80% of all events scheduled for 2020 will be cancelled or postponed with a “gradual recovery” beginning from Q4.
The report forecasts a “strong rebound in outer years”, predicting 26% revenue growth in 2021 and a further 18% increase in 2022.
Yang displays confidence in the willingness of fans to return to live events, but states that the pace and timing of recovery will depend on the health and safety regulations around the world.
The bank’s long-term forecast looks positive for the industry, which it predicts will be worth $38 billion by 2030, putting the sector’s annual growth rate (CAGR) at 6% for the period of 2019 to 2030.
Yang also notes the success the industry has had with new methods of monetising and novel livestream models, making special mention to Travis Scott’s recent in-game performance in Fortnite, which attracted over 12 million concurrent viewers.
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Goldman Sachs: Buy Live Nation stocks
Investment banking giant Goldman Sachs has begun tracking Live Nation’s financial performance, assigning the company’s stocks a ‘buy’ rating following a period of sustained growth.
Shares in Live Nation Entertainment (LYV), which trades on the New York’s Nasdaq stock exchange, today reached an all-time high of US$31.31. Goldman analysts have given Live Nation stocks a target price of $35.
Outlining the logic behind the buy rating, CNBC reports Goldman Sachs’s Drew Borst told clients: “As the world’s largest concert promoter […] and ticketing platform, LYV is uniquely positioned to benefit from secular growth in global concerts and gain marketshare.
“Touring has become increasingly important to artists’ income, given the decline in album sales. On the demand side, the millennial ‘experience economy’ is fuelling steady attendance growth in a wide array of live music events.”
“Live Nation is uniquely positioned to benefit from secular growth in global concerts and gain marketshare”
Live Nation recorded record revenue for the sixth year running in 2016, growing turnover 15% to $8.4 billion.
However, Brandon Ross, an analyst for financial services firm BTIG, warns the profitability of Ticketmaster could be undermined in the long term by Amazon Tickets, which is gearing up for expansion in the US and strengthening its ties with Live Nation rival AEG.
He notes Amazon “has the aptitude to become [a music] industry player, if it can gain access to US tickets market”, and can “target casual shoppers from its large userbase, bundling tickets with other products”.
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