HYBE in talks to raise $380 million to reach beyond K-pop: Bloomberg

HYBE Co., the South Korean entertainment powerhouse behind BTS, is said to be seeking to finance about 500 billion won ($380 million) to bring more US and foreign labels on board as part of its global push, according to a foreign media report on Friday.

Bloomberg earlier reported that the Korean music agency, which also owns the Ariana Grande label Ithaca Holdings LLC, is in talks with investors to secure “equity financing” worth 500 billion won to buy labels in the US, after citing people familiar with the matter.

The Korean company is reported to be flexible with both strategic and financial investors but the final funding size and timing of the deal could change, according to the American financial news organization. HYBE initially sought to raise about 1 trillion won, Bloomberg added. 

HYBE declined to confirm the Bloomberg report, it said.

The news comes after its founder and Chairman Bang Si-hyuk said earlier in March after his retreat from a takeover bid for K-pop pioneer SM Entertainment Co. that HYBE will seek to acquire at least two prominent labels in the Americas this year as part of efforts to become a major player in the global music industry and one that cannot be ignored by the US music industry.

GO BEYOND K-POP TO BE A GLOBAL LEADER

“We decided to go global as we originally planned instead of the takeover (of SM),” Bang said during a news conference on March 15 after noting that K-pop controlled less than 2% of global album and music sales.

The company was looking into a top-tier label in Latin America and one or two labels of hot producers in the US, Bang said at that time.

Bang has repeatedly emphasized that HYBE must find new growth businesses beyond K-pop amid the fizzling K-pop craze worldwide.

HYBE has already taken over major US labels such as Ithaca Holdings and QC Media Holdings Inc., which are now placed under HYBE America. It also has HYBE Japan.

It has been seeking to generate a steady stream of profits by running a multi-label system to manage performers across diverse genres, including Big Hit Music behind BTS, BELIFT LAB Inc. for ENHYPEN, SOURCE MUSIC Co. for Le Sserafim, ADOR for NewJeans and more.

The company has been also actively diversifying its business portfolio by advancing into non-music areas such as the game, performance and fan meeting platforms. It also owns intellectual property, multimedia content and education businesses.

Thanks to the diverse business portfolio, HYBE in early May reported a 41.5% surge in first-quarter profit despite a BTS break. Its operating income for the January-March period reached 52.5 billion won on a record-high revenue of 410.6 billion won, up 44.1%.

The company attributed the upbeat result to BTS members’ outstanding solo works and solid performances by other artists such as boy band SEVENTEEN and girl group NewJeans.

According to the company, its online fandom platform Weverse also boasts 9.3 million monthly active users, up 10% from the fourth quarter of 2022.

HYBE shares on Friday lost 2.7% from the previous day to end at 270,000 won.

Earlier today, the company announced that Scooter Braun, the CEO of HYBE America, disposed of 68,500 shares, or 0.16% in the company, at 27,007 won apiece, collecting 18.5 billion won and reducing his stake in the company to 0.87% from 1.03%.

Write to Sun A Lee at suna@hankyung.com

Sookyung Seo edited this article.