Vinyl Group seals $2.3m deal for UK-based Web3 pioneer Serenade as revenue target hits $20m

The latest deal follows last week’s announcement by the Melbourne-based Vinyl Group that it is buying events business Funkified Entertainment for $2.5 million.

Combined with the $1 million acquisition of Mediaweek in August, the group says the three acquisitions, in addition to organic growth, are expected to double the company’s revenue run rate by the end of the current financial year from $10.5 million to more than $20 million.

Vinyl Group says the expansion of its footprint in the music, media and entertainment sectors will deliver on the broader goal of becoming cashflow positive by the first half of FY26.

The scrip-based acquisition of Serenade will comprise an upfront payment of $800,000 in shares and a scrip earn-out of $1.5 million should earnings targets be met.

Serenade’s digital marketplace has served more than 200 global artists, including the likes of Liam and Noel Gallagher, Muse, Sum 41, Twenty One Pilots and Thirty Seconds to Mars.

Sales of the company’s near field communications (NFC) enabled Smart Formats, which unlock chart-eligible music and content on Serenade’s platform, have grown 56 per cent month-on-month since launching in January this year with 12,000 units sold in the first half of this year.

Serenade has commercial partnerships with more than 100 record labels including Warner Music Group, Beggars Group, Concord, Glassnote, FUGA and PIAS.

The blockchain business will operate alongside the Vinyl.com brand which Vinyl Group says will help improve gross margins in its fastest growing division where annualised revenue is tracking $2 million.

Serenade CEO Max Shand will join the Vinyl Group team as part of the transaction to drive the acquisition’s performance goals while also expanding Vinyl.com’s product offerings into physical and digital collectables and launching into new markets.

“Max Shand has built Serenade into a business with significant potential, and through our acquisition of the platform, we’ll put the resources into Serenade to allow it to reach that potential,” says Vinyl Group CEO Josh Simons.

“Vinyl Group is, at its core, a tech business and this was a great opportunity to expand our tech offering. We look forward to welcoming Max and other key members of the Serenade team to Vinyl Group.”

Serenade joins Vinyl Group on a break-even operating basis selling its “unique NFC collectables to artist superfans”.

Vinyl Group says Serenade has been in “active discussions to expand their offering beyond music to sport and other entertainment verticals”.

The deal for Serenade will see Vinyl Group acquire 100 per cent the company’s assets, excluding its receivables from research and development, in exchange for $800,000 Vinyl shares priced at 9.74c each.

The owners of Serenade will get an extra $1.5 million in shares if the combined business of Vinyl.com and Serenade achieved a minimum revenue target of $4 million and EBIT of $500,000 in the 12 months following settlement of the deal today.

“From our very first conversation, it was clear that Josh, Jorge (CFO Jorge Nigaglioni) and the board shared our vision for supporting artists and audiences through outstanding music products, and so I'm excited to see how this partnership accelerates our impact,” says Shand.

“I also want to acknowledge the incredible Serenade team, whose passion, integrity, talent and dedication made this all possible.”

Vinyl Group says the cash costs of its recent acquisitions including Mediaweek and Funkified total $2.3 million, which will be funded from existing cash reserves.

However, the company notes that this cost was not included in its FY25 budget, meaning that Vinyl will rely on the exercise of large option positions which are due to expire by the end of FY25.

“Further working capital may be sought in H2 to ensure the smooth integration and rapid growth of the new businesses post-acquisition,” says the company.