German collecting society GEMA is selling Zebralution, the digital distributor in which it acquired a stake in 2019. The buyer is US-based investment outfit Insight Holdings Group, which is also a key investor in rival music distributor DistroKid.
Confirming the sale, which is still subject to regulatory approval, GEMA CEO Tobias Holzmüller says that, “in recent years, we have jointly developed Zebralution in key areas and achieved shared strategic goals”. That work, he adds, means the distributor is “now excellently positioned and, with its new shareholders, is gaining additional momentum for technology-driven growth and innovation”.
Insight already has involvement in music distribution. Back in 2021, via its business Insight Partners, it made what it called at the time “a substantial investment” into DistroKid. On its website, Insight says that, since making that investment, it has helped DistroKid “optimise its marketing efforts, enhance global expansion and navigate a critical leadership transition”.
Although having owners in common doesn’t necessarily mean Zebralution and DistroKid will form any closer ties, the two rival businesses do complement each other to an extent, being stronger in Europe and North America respectively. Zebralution also provides more higher-level distribution services to record labels and operates beyond music.
Zebralution was founded in Germany in 2004 when digital music distribution was still in its infancy, providing distribution services to both independent labels and independent artists. Since 2010 it has also been involved in audiobook distribution and, more recently, has moved into the podcast business.
It was slightly surprising when GEMA - Germany’s not-for-profit member-owned collecting society for songwriters and music publishers - bought a majority stake in the distributor in 2019.
But there was a certain logic to the tie-up. Especially in the self-releasing artists domain, where it is much more common for artists to be in control of both their recordings, managed by companies like Zebralution, and their songs, managed by collecting societies like GEMA.
However, Holzmüller says the time is now right for GEMA to sell its distribution business because “we are concentrating even more strongly on our core business: the efficient distribution of royalties, the provision of high-quality services for our members, and the expansion of international licensing”.
According to New Business, GEMA took complete ownership of Zebralution in 2023 following the departure of co-founders Kurt Thielen and Sascha Lazimbat.
An official statement confirms that it will sell 100% of the business to Insights Holdings, which it describes as “an internationally positioned, financially strong investment group” with “extensive expertise in digital business models as well as an investment approach geared toward sustainable growth”.