Music and media download company 7Digital has been backed to the tune of £4.25m by a group of investors led by VC management firm Sutton Place Managers.
The online business, which is led by Ben Drury, a former Growing Business magazine Young Gun, has developed a serious presence in the music sector since launching in 2004.
It is capitalising on being in an industry where growth in downloads is rapidly catching up with traditional formats; digital music now accounts for about 15% of global music sales and the sector is worth an estimated $2.9bn annually.
7Digital has a catalogue of over 3.5 million music and video downloads and distribution deals with companies such as Last.fm and Bebo have helped the company’s sales to increase by 188% in the past year and it now has 1.1 million customers.
“The last year has seen rapid growth in the digital music market and this year we expect it to grow even faster with the move toward the open MP3 format,” said Drury.
“7digital has enjoyed incredible growth in the UK and Europe and with this new investment we are well-placed to expand overseas and into new areas.”
The investment, which includes backing from existing investors Balderton Capital (formerly Benchmark), will enable 7digital to roll out across the US and further into Europe.
The company’s board is also to be bolstered with the addition of Patrick Maxwell, a partner of Sutton Place.
Mark Getty, the founder of Getty Images who is also a partner at the VC management firm, said he believed the company had the potential to become a major player in digital music.
“We are excited to be investing in a platform which has the potential to emerge as a major player in the evolving digital music industry,” he said.
“7digital comprises a unique combination of high quality B2B download store services, an emerging B2C digital media community and a platform for unsigned artists to reach out to digital music consumers.”
© Crimson Business Ltd. 2008
