About a week ago, numerous rumors hit the internet indicating that Zagadat Capital, the investment carrier Of popular Nigerian singer and business mogul, Ajibade Oluwatosin, professionally known as Mr Eazi had earned accolades after the sale of Vydia to Gamma. While some news claimed Vydia is a Zagadat Capital portfolio company, others said that it is owned by Mr Eazi, the question is, what is the truth behind all this? Let’s read further.
What is Vydia?
For the sake of people who don’t know what Vydia is, Vydia is a music company that enables artistes to manage, monetize, and distribute their songs. The firm, bossed by Roy LaManna, was established in 2012 and has generated over $10 million since its beginning. In December 2022, it was purchased by Gamma, although the obtainment was only made public this year. The terms of the deal were also not revealed.
Is Mr Eazi an investor in Vydia?
According to publicly available reports, neither Mr Eazi nor Zagadat Capital is investors in Vydia. Information on Crunchbase indicates that there are six investors in the startup. These include Newark Venture Partners, Vocap Partners, Pasadena Angels, Connected Ventures, QueensBridge Venture Partners, and Canyon Creek Capital. Similarly, none of the articles announcing Vydia’s fundraises list Zagadat Capital as an investor.
Vydia’s SEC filings, after its Series A, put the number of investors at seven but given that Zagadat Capital was launched in 2021, two years after the Series A, there’s very little possibility that it is the seventh investor. Dealroom, however, lists eight investors, including Tech Council Ventures, Eastward Capital Partners, and Group 11. Either way, there are no talks about Zagadat Capital or Mr Eazi. A search for Zagadat Capital’s website doesn’t turn up any results and its Twitter and Instagram handles have a total of three posts.
What is Mr Eazi’s connection with Vydia?
While Mr Eazi is not an investor in Vydia, the connection he has with the organization is a partnership with emPawa Africa to launch Cinch Distro, a music distribution platform. Nevertheless, an ambassador from emPawa Africa alleges that emPawa Africa Ghana invested in Vydia in 2021, while a tweet from Mr Eazi appears to confirm this.
Why are there reports of a $1 billion deal?
Much of the news have indicated that the Vydia obtainment is worth about $1 billion. However, that is highly uncertain given that Vydia’s last fundraise was a $7 million Series A. Although its valuation was not disclosed and its financials are not available to the public as it’s a private company, a $1 billion valuation is a big leap.
What is the fuss of $1 billion about?
This $1 billion actually serves as a reference to the amount of funds raised by Gamma for its investments. According to a press release introducing Gamma, the company wants to change the way musicians create and distribute their music.
The company which was founded by Larry Jackson, a former Apple Music Creative Director, has raised capital to drive its investments from investors such as Elridge — which many may know as the company owned by Chelsea owner — Todd Boehly, Apple Music, and A24.
The amount raised has also not been officially announced. While some reports say it is about or close to a billion dollars, others say the actual figures are way lower but there are no concrete reports about the exact figure.
Is Mr Eazi a billionaire?
Yes! He is a billionaire. The 33-year-old musician and entrepreneur have done well for himself by establishing several business investments like a food distribution company, soft drink company, and sports betting firm, BetPawa.
How do investors make money from the sale of a portfolio company?
If you’re a normal reader of the Equity Merchants series, you’re acquainted with how traders recoup their investments in a startup. The three main approaches this takes place are with the aid of promoting shares to every other investor, a public listing, or thru an acquisition. In every case, the company or men and women that had invested in an employer solely get the equal of their investment. For example, if you personal 3% of a corporation that was once offered for $50 million, you would solely acquire $1.5 million.
Using a greater famous example, when Paystack was once obtained for $200 million, it had raised $10.4 million from forty buyers in accordance with its SEC filings. This would suggest that all traders and the founders owned unique percentages of the company. So an investor who owned 10% of the corporation would solely have acquired $20 million. If the investor was once a fund, the equal applies however that won’t be cash that goes to any of the companions or personnel of the fund given that they have to return some cash to their confined partners.
Finally, based on publicly available information, neither Mr Eazi nor Zagadat Capital is an investor in Vydia and so cannot benefit from any sale regardless of the figures involved. Still, emPawa Africa claims to be an investor through its subsidiary emPawa Africa Ghana.
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