Laggard UK music retailer HMV is buying a 50 percent stake in the UK-based online music retailer 7Digital for $12.6 Million (£7.7 million). The move looks set to give HMV a ‘great leap forward’ in digital, since 7Digital has been fleet of foot in pushing non-DRM MP3s, open formats, its white label API and signed deals with tech rock stars like Spotify and many major record labels.
The purchase creates a neat exit for 7Digital’s VC backers Balderton Capital and Sutton Place Managers. CEO Ben Drury told me that the VCs got a “positive return on investment” – though terms have not been disclosed. In January last year it took £4.25 million in a round led by Sutton Place Managers that included original investor Balderton Capital. HMV Group will now use the five year-old 7Digital as its sole supplier for “all of its existing digital operations” in the UK and Canada.