Music startup Teenage Engineering fills up its empty coffers with a total of 18.8 million SEK as sales continue to increase.
Teenage Engineering is something of an odd bird in the Swedish business world. The purveyor of innovative, portable synthesizers and samplers has so far chosen to just say “no” to venture capital. Their office is in a garage decorated with Lamborghinis, and according to co-founder Jesper Kouthoofd in a previous Breakit interview, they hope to one day be owned by the Swedish state.
“All the big stars have used our synth,” said Mr. Kouthoofd. “I know Hans Zimmer used it on (his album) Interstellar and in his soundtracks to the Spiderman movies. Game companies use it to make sound effects. Hip-hop producers use it, even Jay-Z.”
Currently, Teenage Engineering appears to be experiencing a significant sales increase. According to their recent annual report, they had net sales of 62.6 million SEK in 2015. That compares to 35 million during the preceding 18-months.
According to the annual report, sales have increased sharply in 2015, thanks to launch of new products including the OP-1 portable synth, the OD -11 speaker, and the Pocket Operator mini-synth.
While things are looking up today, the hardware startup has had a few problems. Last year, Teenage Engineering reported a loss of 7 million SEK. In the preceding extended tax year, the firm reported a loss of 11 million SEK.
At beginning of 2016 Teenage Engineering had just over 4 million SEK to their name.
“Around the turn of the year, OP-1 sales were lower than expected, due to supply problems with one component,” the company said in the annual report.
To cover that sales gap, Breakit can now reveal that Teenage Engineering has closed a major round of financing. The capital comes in the form of a convertible loan, which may be changed to new shares in 2019, if it remains unpaid. The synth firm has raised further funds via of a new issue of shares
The 12.6 million SEK loan comes mostly from Frankenius Equity, owned by Gina Tricot chairman Paul Frankenius, who lent 7.4 million SEK. An additional 4 million plus was added by Anders Halvarsson, Teenage Industries’ chairman, also known as the founder of Amazon Marketplace and Chairman of Amazon Group.
In addition to the convertible loan, the company has also brought in 6.2 million through a new issue. Behind the money are Teenage Engineering’s four founders, Jesper Kouthoofd (who previously co-founded Acne International), David Möllerstedt (previous sound manager at the gaming company EA DICE), David Eriksson (former founder of Fatslice) and developer Jens Rudberg.
In this round of financing, the company was valued at 65 million SEK.