UK music streaming startup backed by Kylie secures £13m funding

Investment puts Roxi on track for a potential £200m flotation on London Stock Exchange

A British music streaming startup backed by Kylie Minogue and Robbie Williams has secured multimillion-pound funding from investors including the former EMI chairman Guy Hands and the private equity firm Sun Capital, whose portfolio has included Pizza Express and Punch Taverns.

The investment puts the firm on track for a potential £200m flotation on London’s stock market.

Roxi touts itself as the world’s first “made for TV” music experience, offering products including karaoke and a 55m song catalogue, and is currently available on Sky’s Q service and Google’s Android TV.

Last month it announced Minogue as an investor in a three-year deal that includes fronting its advertising campaigns.

It has raised £13m in funding to accelerate the delivery of the service and expand internationally.

This is Hands’ first dabble in the music industry since his private equity firm Terra Firma’s ultimately disastrous £4.2bn takeover of EMI, then home to Minogue and Coldplay, in 2007.

The funding round, which is thought to value Roxi at about £50m, will be used to expand the service to potentially 500m devices by 2022 by launching on platforms from Samsung and LG smart TVs to PlayStation and Apple TV.

“We have seen huge growth during lockdown, with people using their TVs for more interactive entertainment at home,” said Rob Lewis, Roxi’s founder. “The fundamental thing is when you are looking at a potential initial public offering in the future you want to be growing as quickly as you possibly can be. And with this funding, Roxi is ready to start to roll out on other platforms and in other countries.”

The funding round, the first to bring on an institutional investor, includes figures such as Henrik Holmark, the former finance chief at the music service Pandora, and Chris Wright, the founder of Chrysalis Records. Other backers include Lorna Tilbian, the chairman of Dowgate Capital and a former board member at the ad group M&C Saatchi, and Roxi’s chairman, Rupert Howell, a former senior executive at ITV and the publisher of the Mirror.

Existing investors include the McLaren Group founder, Ron Dennis, and Paul McGuinness, the former manager of U2.

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If Roxi can hit its growth targets it is understood to be looking to make an initial public offering on the London Stock Exchange in 2022. Interest is booming in businesses attempting to tap into the music streaming phenomenon, with the world’s three biggest labels – Universal Music, Warner Music and Sony Music – also shareholders in Roxi.

Hipgnosis, a London-listed firm offering investors the chance to cash in on the royalties from songs by artists from Bon Jovi to Beyoncé, has raced to a £1bn valuation. In August the British music tech startup MelodyVR, which films and streams gigs fans watch with virtual reality headsets, bought the streaming pioneer Napster with the aim of creating a “truly next-generation music service”.

Edward Spencer-Churchill, the co-founder and partner of Sun Capital Partners, said: “We are excited by Roxi’s opportunity to deliver unique, fun music entertainment experiences into the home. The potential is huge, with mass-market appeal and a nation waiting to be entertained.”

Contributor

Mark Sweney Media business correspondent

The GuardianTramp

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