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- June 8, 2023
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Last week, Bloomberg broke the news that HYBE was raising around USD $380 million “to fund acquisitions in the US and expand its business beyond K-pop”.
Industry sources have subsequently suggested to MBW that the final number in HYBE’s raise could be even bigger.
“I’m told they already have USD $1 billion committed to this raise,” said one well-placed source with knowledge of HYBE’s process. “It could stay there, or move up even higher.”
What is HYBE going to spend – or at least try to spend – this money on acquiring?
Many suspect that HYBE will particularly target M&A opportunities in Latin Music with the money, as that category continues to explode.
Latin Music surpassed $1 billion in US recorded music revenue in 2022 and claimed an 8% market share of streaming revenues in the market.
Rumors of HYBE’s interest in Latin Music were recently amplified by Bang Si-Hyuk, HYBE’s Chairman, when he told CNN that he’d been watching the genre – alongside afrobeats – grow “very rapidly” on a global scale.
Bang has shown that HYBE isn’t scared of spending serious sums in the Americas before: in 2021, the Korean firm splashed USD $1 billion-plus to acquire Scooter Braun’s US-based Ithaca Holdings – now operating as HYBE America – including both Braun’s management company plus Ithaca’s subsidiary, Big Machine Label Group.
In February this year, HYBE secured yet another foothold in the US entertainment business when HYBE America, led by Braun, acquired Atlanta rap powerhouse QC Media Holdings aka Quality Control, home to acts such as Lil Baby, Migos, Lil Yachty and City Girls, in a deal was worth $300 million, according to Korean regulator filings.
Below, MBW highlights 10 companies that have enjoyed major independent success in the Latin Music space in the past few years.
A number of them are operating in the Regional Mexican genre, which is seeing rapidly growing popularity amongst Gen Z listeners in particular, and dominating recent Spotify global charts.
If HYBE was to target any of the ten companies below for acquisition, it would likely have to come with an extremely attractive offer.
All of them are businesses already enjoying substantial commercial prosperity while operating independently. And most of them are doing so hand-in-hand with a deep-pocketed major record company partner.
You only have to look at the runaway success of Sony Music‘s The Orchard in Latin Music over the past decade for evidence: run by CEO Brad Navin, The Orchard has forged strong partnerships with a plethora of Latin Music’s biggest indie players, including Rimas Entertainment (Bad Bunny), Prajin Music Group (Peso Pluma), and Real Hasta la Muerte (Anuel AA).
Universal’s Virgin Music Group is another key partner of leading Latin indies, in addition to Warner Music Group‘s ADA.
Sony Music has been particularly aggressive in M&A in Latin Music over the past few years and doesn’t appear to be letting up – having recently reportedly engaged in talks to buy a stake in Bad Bunny’s (Orchard-distributed) label and management firm, Rimas.
In 2021, Sony Music acquired the music catalog of Mexican regional label and management company Remex Music; in the same year, it splashed $255 million on the acquisition of Brazil’s biggest domestic label, Som Livre; and last year, Sony acquired a minority stake in the indie record label (WKR) of one of Latin Music’s most successful impresarios, Walter Kolm.
Can HYBE make its own acquisitive dent in the Latin Music market in the months ahead – as it goes toe-to-toe with major record companies to woo entrepreneurs in the space?
Maybe, maybe not. But you can bet Scooter Braun and Chairman Bang are keeping a close eye on at least some of the following firms…
1) Prajin Music Group
The first, and perhaps most obvious, potential acquisition target for HYBE is active in the mushrooming Mexican music space.
Prajin Music Group (incorporating Prajin Records / Prajin Parlay Inc), founded by attorney and entrepreneur George Prajin, is home to Peso Pluma, the rising superstar taking regional Mexican music mainstream.
As you read this, Pluma has two of the Top 5 global songs on Spotify, including the No.1 (Ella Baila Sola, a smash hit collaboration with American regional Mexican group, Eslabón Armado, that has over 500m streams on the platform to date).
Pluma (pictured inset) recently formed his own record label called Double P Records, where he serves as Head of A&R and CEO, and has already signed artists Jasiel Nunez, Tito Laija and Raul Vega.
Double P operates as a subdivision of Prajin Music Group, which holds a global distribution deal with Sony Music’s The Orchard.
Rolling Stone reports that “Peso will continue to release music through Prajin Records, but it’ll merge into the Double P project”.
Prajin Music Group is home to a number of other properties including Z Records, Grand Records, Mejico Music, Andamos Recio Music and Prajin Parlay Studioz.
It’s also home to a number of other artists and has over 1.2 million YouTube subscribers.
Why might HYBE swoop for Prajin? We’re only in the beginning stages of Peso Pluma’s global breakthrough. Combine that with George Prajin’s expertise in ‘modernized’ regional Mexican music, and you have an attractive combination.
2) DEL Records
Another possible target for HYBE is Los Angeles-based DEL Records, Inc., which claims to be “the most successful Latin independent entertainment label in Regional Mexican music today”.
Del operates across recorded music, publishing and entertainment and was launched in 2009 by CEO, Angel Del Villar.
A key attraction at DEL for an acquisitive company like HYBE in a booming Musica Mexicana market is the former company’s superstar regional Mexican group, Eslabón Armado (Peso Pluma’s collaborators on Ella Baila Sola).
Eslabón Armado (pictured inset) have over 40 million monthly listeners on Spotify on themselves and have generated hundreds of millions of streams outside of their hit with Peso Pluma, with tracks like Jugaste y Sufri (385m).
In addition to Eslabon Armado, DEL has worked with artists like Gerardo Ortíz, Luis Coronel, Ulices Chaidez y Sus Plebes, and Régulo Caro.
DEL Records has enjoyed an unbroken distribution agreement with Universal Music Group‘s Ingrooves / Virgin Music Group over the past decade.
3) Real Hasta La Muerte
Puerto Rican rapper Anuel AA is another one of the Latin Music sector’s biggest global acts with over 35 million monthly listeners on Spotify alone.
One of his biggest hits, China, with Daddy Yankee, and Karol G, has been streamed over 1 billion times on Spotify.
The independent Latin Trap star runs his own record label called Real Hasta la Muerte (RHLM) which was founded in 2017 and – like Bad Bunny and Noah Assad’s Rimas Entertainment – is distributed by The Orchard.
Anuel AA (pictured inset) released his album Real Hasta la Muerte via the label in July 2018 and was certified Platinum in less than two months after its release.
(Anuel AA inked a direct distribution agreement with The Orchard in 2019, including global physical, digital and video distribution of his Real Hasta la Muerte album and for his next album Emmanuel.)
Emmanuel was released via the label in May 2020, debuting at No.1 on Billboard‘s Top Latin Albums chart and No.1 on Latin Rhythm Albums.
Anuel AA’s global stardom extends beyond music, having recently struck a long-term deal with Reebok to serve as an ambassador for the footwear and sports apparel brand.
4) Neon16
Another possible acquisition target for HYBE could be Neon16.
The company was founded by music exec Lex Borrero in 2019 alongside Tainy (pictured inset), one of music’s most successful and influential producers of the last decade (whom Borrero manages).
Speaking with MBW last summer, Borrero explained his ambitions for Neon16 to become “the Roc Nation or the Bad Boy of Latin Music”.
The multi-faceted company operates across artist management, experiential events, as well as film and TV soundtracks.
Its management roster includes Yandel, Dylan Fuentes, Kris Floyd, Manuel Lara, Rudeboyz and Jodosky.
Neon16 partnered with Paramount and Nickelodeon to executive produce The Spongebob Movie: Sponge On The Run movie soundtrack.
In 2021, Borrero partnered with legendary music executive Tommy Mottola and Range Media Partners to launch Latin-focused content and media company, Ntertain.
We learned this week that, Firebird – co-founded by ex-KKR Partner Nat Zilkha and ex-Ticketmaster CEO Nathan Hubbard, with Raine Group as its lead investor – had invested in Ntertain.
5) Rancho Humilde
Latin Music currently occupies the top five slots of the Spotify Global Top 50 and six in total of the Top 10.
One of the acts occupying one of those positions is Fuerza Regida, a California-based regional Mexican band, with their track TQM, currently sitting at No.10 with over 3.5 million plays.
The company behind Fuerza Regida is Jimmy Humilde’s independent Los Angeles-based label Rancho Humilde Records.
Rancho was founded by Humilde, Roque Venegas and Jose Becerra in 20011 and releases music targeting second and third-generation Mexican Americans in the US known as a new wave of urban regional “corridos.”
In addition to Fuerza Regidas, some of the label’s biggest stars include the likes of Junior H and Natanael Cano, who are a part of a roster of more than 80 artists.
As noted here in this Chartmetric analysis of the ‘corridos tumbados’ subgenre, those three Rancho Humilde artists – Natanael Cano, Junior H and Fuerza Regidas – saw their combined total Spotify monthly listeners increase from 1.6 million at the beginning of 2019 to 54.1 million in 2023.
Rancho itself has a vast online audience, with over 8.48 million YouTube subscribers.
Jimmy Humilde recently told Billboard that Rancho had inked a “one-off deal with Republic and Universal” because it “needed the reach”.
6) Altefonte
While not based in the US or Latin America, Madrid-based music distributor Altafonte is still very much a power player in the global Latin Music sector.
Founded by Nando Luaces (pictured inset) in 2011, The Madrid-based distributor has over 150 staff across 11 offices.
It represents some of the Iberian and Latin markets’ biggest breakout stars, including superstar DJ Alok, as well as legendary acts like Gilberto Gil.
Artists that work with Altafonte held 26 nominations at the Latin Grammys in November, going home with six wins.
“We are incredibly proud that as a truly independent, owner-operated company, we can achieve 26 nominees and win six Latin Grammys,” Nando Luaces told MBW earlier this year.
Luaces also told us that the company is seeing particularly fast growth in Brazil, Mexico, Colombia, and the US.
7) AfinArte
If HYBE doubles down on acquiring active indies working with the global-music-of-the-moment – regional Mexican artists – then its search will likely bring it to the door of AfinArte.
The label, distributed by Believe, has over 5.1 million subscribers to its YouTube channel and has enjoyed success with artists such as El Fantasma (over 8 million Spotify monthly listeners, pictured inset), Los Dos Carnales (6.5 million Spotify monthly listeners), and Voz de Mando (2.8 million Spotify monthly listeners).
Tracks released by these artists are generating hundreds of millions of streams: El Fantasma’s (pictured) Palabra De Hombre has over 202 million streams on Spotify and 300 million on YouTube (see below).
Speaking with MBW about the rise of regional Mexican music in April 2022, AfinArte founder and CEO, Luis Sánchez, said that he “want[s] AfinArte Music to become the leading label of Regional Mexican music not only in the US and Mexico but globally”.
8) Rich Music
Founded in 2007 by entrepreneur Richard Mendez and his son Joshua Mendez, Rich Music’s roster features prominent Latin Music artists Sech (pictured inset), Dalex, Justin Quiles and producer Dimelo Flow.
In February 2017, Miami-headquartered Rich Music signed a distribution deal with Sony Music’s Latin division.
In April of the same year, Rich Music was nominated as Latin Label of the Year at the Latin Billboard Awards.
The Miami-based label has over 1.5 million YouTube subscribers and one of its biggest stars, Panamanian Reggaeton and R&B star Sech, has over 9.8 million subscribers on the platform.
Other artists on the company’s roster include Jamaican singer, producer & songwriter Chris Marshall, Argentinian singer-songwriter Thyago, and Puerto Rican singer-songwriter PaoPao.
9. Glad Empire
Also headquartered in Florida is Latin Music specialist and independent music powerhouse, GLAD Empire.
The company is described as a “full-service company specializing in digital distribution, artist development, music publishing, graphic design, marketing, music and video production”.
Glad was founded in 2006 and is led by co-CEOs Camille Soto Malave and Alberto Mendoza Nieves (aka MC Ceja).
GLAD Empire houses nine separate divisions, including Glad Core distribution, graphic design studio Glad Arts and Get Low Studios housing four recording spaces, including three in its home town of Orlando and one in Guaynabo, in Puerto Rico.
It also operates a recorded music division called Glad Records, a Christian record label (Praise Music) and a gaming division.
Could GLAD’s multi-label, multi-division strategy fit neatly with HYBE’s own multi-label vision?
As reported here by the Silicon Valley Review, founder and co-CEO Soto has a vast network across the Latin Music business.
She acts as label manager for Anuel AA’s Hasta La Muerte record label, and also handles the music publishing department for indie label Aura Music, run by another Latin Music superstar, Ozuna.
10. Dale Play Records
Last, but definitely not least, on our list is Argentina-based Dale Play Records.
Formed in 2018 by Federico Lauría, the music company releases music by superstar producer and DJ Bizarrap, whose Bzrp Music Sessions with various Latin Music artists are undeniable streaming megahits.
Bizarrap’s Bzrp Music Sessions Vol. 52, with Spanish rapper Quevedo, for example, has been streamed over 1.2 billion times on Spoitfy alone.
The follow-up, Bzrp Music Sessions, Vol. 53 with Shakira has been streamed 654 million times on Spotify alone.
Bizarrap has over 44 million monthly Spotify listeners and 20 million subscribers on YouTube.
His most recent video, Bzrp Music Sessions #55, with Mexican superstar Peso Pluma, was released seven days ago and already has over 61 million views.
Streaming numbers like these would almost certainly excite any company with a stack of cash to spend on acquisitions in the Latin Music space, but there might be a hitch for HYBE: Dale Play reportedly struck an “exclusive partnership with Sony Music” in 2020.
Dale Play’s roster also features rapper Duki, who has over 22 million monthly listeners on Spotify.Music Business Worldwide
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