Venture Capital backers Balderton Capital and Sutton Place Managers have sold their 50% stake in 7digital to music and games company HMV for £7.7m.
Launched in 2004, 7digital powers digital entertainment services for clients across Europe and the US, including Spotify and Last.fm. Although, HMV clearly sees value in the venture, 7digital is expected to make an EBITDA loss of £1m by the end of the year.
Following the acquisition, 7digital will become HMV’s single supplier for all of its existing digital operations. The music retailer will have access to over six million digital music tracks as well as video entertainment.
Co-founders of 7digital Ben Drury and James Kane will continue to lead the business. However a new Joint Venture Board will include three directors from HMV.