https://www.bloombergquint.com/markets/former-startup-darling-genius-sells-assets-for-80-million

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[                    ]
Former Startup Darling Genius Sells to Media Lab for $80 Million

  * Sarah McBride

Bookmark
Sep 16 2021, 7:21 AMSep 17 2021, 2:09 AMSeptember 16 2021, 7:21
AMSeptember 17 2021, 2:09 AM
(Bloomberg) -- Music-annotating startup Genius Media Group Inc., a
site that drew attention in part for outsized funding from venture
capitalists, has sold its assets to a Santa Monica, California-based
media holding company for $80 million.

(Bloomberg) -- Music-annotating startup Genius Media Group Inc., a
site that drew attention in part for outsized funding from venture
capitalists, has sold its assets to a Santa Monica, California-based
media holding company for $80 million.

The buyer is MediaLab.Ai Inc., which will cut some jobs as part of
the process. "We are restructuring the way in which original content
is produced at Genius and as part of that some very talented
individuals on the content and production teams were let go,"
MediaLab said in a statement. The company will not make cuts to the
teams handling sales, product or engineering, said a person familiar
with the matter who asked not to be identified discussing private
information. "The scale of the community platform is what attracted
us to Genius and this is where we will be heavily investing going
forward, with a renewed focus on emerging artists," the company
said. 

Genius, a Brooklyn-based company that got its start providing context
for rap lyrics, will join a portfolio at MediaLab that includes
once-buzzy messaging apps such as Kik and Whisper. It also owns
mixtape app DatPiff. On its website, MediaLab says it attracts more
than 80 million users monthly.

"MediaLab's commitment to investing in artists and fan-driven
communities makes them the ideal partner to propel Genius forward,"
said Tom Lehman, co-founder and chief executive officer of Genius.
"We are immensely grateful to everyone who has made Genius what it is
today."

The sale represents a comedown for Genius, which at one time drew
contributors ranging from singer-songwriter Lorde to rapper Nas to
music producer Rick Rubin. It entered into partnerships with Spotify
and Apple Music. 

But the startup faced challenges. Its price tag of $80 million
represents less than what it raised over the years in venture
capital, according to PitchBook.

In 2012, Genius, then known as Rap Genius, raised eyebrows in Silicon
Valley when Andreessen Horowitz, then a relatively young and untested
venture firm, invested $15 million in the business. At the time, that
was a considerable sum of money for a three-year-old company, but its
backers seemed convinced of the site's potential.

Genius's mission was to "create the Internet Talmud," wrote Marc
Andreessen in a blog post in 2012, referring to interpretive texts on
Judaism. He suggested the company could expand to "annotate the
world," including "poetry, literature, the Bible, political speeches,
legal texts, science papers." In fact, it had trouble expanding
beyond its core group of music fans.

Because the company's obligations to its preferred shareholders
exceeded the sale price, investors won't be paid out in full,
according to a document reviewed by Bloomberg. Genius finalized the
deal to sell its assets this week, with $60 million paid on closing
and $20 million to be paid in two years.

(c)2021 Bloomberg L.P.

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