7digital has sealed a critical loan from a UK-based lender, prolonging the company’s hunt for profitability.
London-based digital music and radio services platform 7digital has secured a 12-month, $646,000 (£500,000) loan, and company executives are confident that the funds will help their brand to regain its professional footing and re-establish its position in the market.
Last year, it was reported that 7digital’s revenue had dropped substantially following the loss of MediaMarktSaturn Retail Group, a German consumer-electronics retailer and a major client. Corresponding cuts were made to expenditures, and multiple board members extended sizable credit lines to the company. Executives signaled that 2020 would mark a return to profitability for the brand, which was founded in 2004.
The mentioned $646,000 loan, which was issued by an unnamed UK lender at an interest rate of 1.5 percent per month, is being touted as the next step in the process, with operational profitability sought by the close of this year’s halfway point.
7digital has indicated that the non-dilutive capital — meaning that it resulted from a traditional loan as opposed to an exchange for equity in the company — will be used for operational funding purposes throughout the year, while current deals are expanded and new deals are sought. In the past, 7digital has struck agreements with Universal Music Group, Sirius, Yahoo, BBC, and a number of other well-known brands.
Addressing the newfound funding in a statement, Tamir Koch, 7digital’s nonexecutive chair, said that it will enable his company to continue growing into 2021. Koch also emphasized that “7digital has signed multiple contracts in recent months,” and that these and other partnerships will help to make the second-quarter profitability goal a reality.
7digital, which is traded on the London Stock Exchange (LSE) under the symbol 7DIG, was performing relatively strongly in January, until markets around the world suffered losses in response to the ongoing coronavirus (COVID-19) epidemic. Since January 24th, the company’s stock has dropped by nearly 50 percent, from .52 GBX to today’s low of .31 GBX.