Sector:   Tech-enabled  
Overview:  Online retailer of musical instruments
Investment year 2012
Status Realised 
Headquarters York

Gear4music is an online retailer of musical instruments and equipment based in York. The business was founded by CEO Andrew Wass in 2003 with the support of two angel investors. At the time of Key’s investment in 2012 the company was making sales of c.£10 million.

The team at Key spoke our language. They structured the deal that allowed us to make the most of the market opportunities we had identified, and also encouraged us to think about our business in a way that we had not done before. Most importantly, they helped us to professionalise our approach and we now react to opportunities with far greater insight.

Working with Gear4Music...

Investment process

We invested £3.4 million to buy-out the two angel investors and provide £1.5 million of development capital to the business. At the same time an option scheme was created to attract and retain additional senior management.

Growth process

As well as enabling the buy-out itself and passing control into the hands of the driving force; the management, our investment enabled the company to significantly increase the depth and breadth of its stock holdings which undoubtedly drove significant growth. Expansion into new geographies was identified as the next value driver and as such we introduced a specialist consultancy firm to assist management in planning their European distribution strategy. In terms of team, we introduced a Non-Executive Chairman, a Financial Director and had significant involvement in hiring other senior talent including the recruitment of a Commercial Director.

Exit process

In 2015, the growth profile of the Company merited further investment to support the push into Europe. We introduced the Company to a specialist AiM broker who assisted the Company in achieving an AiM IPO to fund an accelerated European roll-out and a partial realisation for us. We fully exited by selling our remaining stake in 2016 on a prospective EBITA multiple of 36 times.