As 7digital’s revenues rise they look towards £3 million in fundraising and taking over their only remaining European competitor – ’24-7 Entertainment’.

UK music company 7digital are making some big moves as they plan to purchase their sole European competitor in music service provision, German company 24-7. 24-7 are one of the few veterans in the digital music startup arena, launching in 2000 before being taken over by MediaMarktSaturn with a majority holding.

7digital have found themselves with a great increase in revenues in recent years, with a 15% rise in 2016 to £11.9 million for the whole year. Whilst the company is yet to make a profit their losses dropped down to £5.2 million last year, compared to the £7.9 million statutory loss in 2015.

7digital chief executive, Simon Cole said: “2016 was a year in which many of our strategic objectives were achieved, including the delivery of a final quarter of positive EBITDA. The year saw our position in the emerging digital music ecosystem further strengthened, with the industry’s three major record labels becoming customers and our investments in readying our platform for Hi-Res audio delivery beginning to show return through new customer signings.

“Our platform now delivers streams to over 16 million people worldwide – close to the level of Apple Music (20m subscribers) – through an increasingly diverse range of customers across a widening number of geographies. This growth will underpin long-term profitability as the music streaming industry develops to include mainstream listening.”

With their increased success 7digital have also revealed their aim to raise £3 million. The proposed placing will go at 6.5p a share to raise proceeds of £2.26 million with an open offer for up to £750,000 from qualifying shareholders. The price of 6.5p a share has a discount of 10% on their most recent closing middle market price.

Simon Cole continued: “Our strategy to consolidate the market for supply of business-to-business streaming services included last year’s successful integration of the French business ‘Snowite’. Today we are announcing that we have agreed heads of terms for the acquisition of our only remaining significant European competitor, 24-7 Entertainment, which will include the contract to supply its current owner, MediaMarktSaturn, Europe’s biggest electronics and entertainment retailer.

“We would expect to significantly strengthen our licensing revnues if the transaction completes as anticipated. The proposed capital raising announced today will strengthen our balance sheet as we move into our next phase of growth, and we are grateful for the support of current and new shareholders who are participating. 7digital has a strong pipeline and is enjoying increasing momentum, and the Board remains committed to being profitable at the operating level for the full year in 2017.”