Vinyl Group, Australia’s only publicly traded music company, has acquired the assets of London-based Serenade, a platform focused on digital and physical collectibles, in an equity-based deal worth up to $1.6 million.
Vinyl launched its website last year, aiming to recreate the “crate digging” experience for records in digital form, CEO Josh Simons said Declutter. The acquisition marks the group’s expansion into the UK and European markets while expanding its digital collectibles offering.
“The plan was always to expand Vinyl.com’s offering to include music merchandise, digital collectibles and experiences that connect fans with creators, and the acquisition of Serenade was the next step in that process,” said Simons.
Under the terms of the deal, Vinyl has made an upfront payment of $553,000 in stock, with an additional $1 million in stock subject to revenue and profit targets.
The deal was completed over the weekend, with Vinyl notifying Serenade that due diligence requirements had been successfully met.
The performance-based earnout requires the combined Vinyl.com and Serenade businesses to achieve $2.76 million in revenues and $345,000 in earnings before interest and taxes within twelve months of the acquisition.
Serenade, which operates a marketplace for both physical and digital collectibles, has previously supported more than 200 international artists, including high-profile names such as Liam and Noel Gallagher, Muse and Sum 41.
The company also has partnerships with major record labels, including Warner Music Group and Beggars Group.
Serenade runs on the Polygon blockchain, a layer 2 scaling solution for Ethereum. Its flagship product, NFC-enabled digital ‘Smart Formats’, built on top of Polygon’s infrastructure, has seen 56% month-over-month sales growth since its launch in January, the company claims.
NFC-enabled digital Smart Formats are physical collectibles embedded with Near Field Communication technology that link to a digital asset or experience, typically hosted on a blockchain.
These formats allow users to access digital content, such as music, exclusive videos or digital artwork, by interacting with the physical item via their smartphone or other NFC-enabled devices.
Serenade CEO Max Shand will work at Vinyl Group on a full-time employment contract. Shand will receive five million options, granted in phases after achieving specific performance targets as part of his incentive package.