SPARK Ventures

SPARK increases Kobalt valuation

LONDON, U.K. (5 February 2008) - SPARK Ventures plc (SPARK) is pleased to announce that Kobalt Music Group Ltd (Kobalt), a leading independent music publisher and one of its largest portfolio companies, has signed an agreement with Balderton Capital whereby Balderton will invest new equity in Kobalt. This transaction will result in a 60% uplift in the valuation of SPARK's investment in Kobalt, increasing from £4.4m to £7.0m. The agreement will also see Tim Bunting, partner at Balderton Capital and an ex partner of Goldman Sachs, join the Board of Kobalt.

Kobalt was established in 2001 to provide a modern, efficient and transparent music publishing model that would better service the needs of the songwriters and copyright holders by leveraging technology.

SPARK originally provided significant seed investment to Kobalt in 2001. Since then, Kobalt has grown rapidly with revenues growing on average at over 100% per annum over the last three years. Its roster of writers has composed songs for artists such as Leona Lewis, Madonna, Natasha Bedingfield, Eminem, Robbie Williams, Gwen Stefani, Pink and Avril Lavigne among others. During 2007, Kobalt was both a top U.K. and U.S. independent publisher with a U.K. ranking at No. 5 publishing market share (source: Music Week) and a ranking as No. 6 in publishers market share for U.S. Airplay charts (source: Billboard Magazine).

Tom Teichman, Chairman of SPARK and Kobalt said: "We are delighted to have an investor of Balderton’s quality on board with Kobalt and would like to welcome Tim Bunting to Kobalt’s Board. I am confident that this new relationship will add significant value to Kobalt’s winning formula."

Willard Ahdritz, Founder and CEO of Kobalt added: “We’re excited to work with Tim Bunting and Balderton Capital. This new capital injection will bolster our plans to further expand internationally, as well as help fund sizeable pipeline advances and the roll out of new services for music rights holders.”

Tim Bunting, Partner at Balderton Capital, added: “We are proud to join the Kobalt team as it further rewards and empowers the creative talent in the music industry. Kobalt is working with performers, copyright owners and songwriters to deliver to consumers and creators.”

The investment is subject to shareholder approval at the forthcoming Kobalt EGM.

Close Brothers advised Kobalt on the transaction.

Enquiries:
SPARK Ventures plc
Andrew Carruthers / Thomas Teichman 020 7851 7777

Buchanan Communications
Isabel Podda 020 7466 5000

Collins Stewart Europe Limited – Nominated adviser
Seema Paterson 020 7523 8321

Kobalt
Rebekah Alperin +1 310 770 1045

About SPARK Ventures
SPARK Ventures is the leading quoted early-stage venture capital company in Europe managing £225 million on behalf of major institutional investors, leading UK universities, and three quoted venture capital trusts.

SPARK invests in entrepreneurs to create dynamic businesses in the technology, media, telecoms and healthcare & life sciences sectors. As well as capital, it brings a wealth of experience of developing high growth companies from early stage through to IPO or trade sale, adding value to its investments through active support and strategic direction.

SPARK’s focus is on building great companies from small beginnings: its experience blends ambition with the strategic, financial and commercial skills that enable it to maximise returns, both for investors and for portfolio companies.

The SPARK Ventures team has been responsible for many successful exits including Mergermarket, Lastminute.com, Nomad, Footfall, Pricerunner, Elata, Glycart, OHM and Avidex amongst others.

www.SPARKventures.com

About Kobalt
Kobalt is a leading independent music publisher offering global copyright administration, creative and synch/licensing services, and advances to writers, publishers and other publishing rights holders. With offices in London, New York, Nashville, Los Angeles, Berlin and Stockholm, as well as agents in over 20 major territories, Kobalt administers more than 100,000 copyrights worldwide on behalf of over 700 clients. Clients include Gwen Stefani, Moby, Barry Manilow, Dr. Luke (producer of Avril Lavigne, Kelly Clarkson, Pink), Ryan “Alias” Tedder (producer of Leona Lewis, Natasha Bedingfield) and Max Martin (producer of Sugababes, Britney Spears), Desmond Child, 8 Mile Style, Bridgeport Music, Shelly Peiken, The Hives, Editors, Hilary Duff, Richard Ashcroft, Nine Inch Nails amongst others.