Music tech company Kano races to secure new funding after Kanye row
Kano, which dissolved a partnership with Kanye West over antisemitic remarks he made, is working with AlixPartners to secure new funding.
Kano, a consumer technology designer and manufacturer which until recently counted Kanye West as a partner, is racing to secure millions of pounds in new funding.
Sky News has learnt that Kano, which has refocused its business to focus on producing innovative music players, has appointed the advisory firm AlixPartners to work with it on sourcing additional financing.
The new capital is designed to fill a funding gap exposed by the collapse of its alliance with Kanye, the company's founder Alex Klein told investors recently.
The partnership with the musician was dissolved amid a furore over antisemitic comments he made last year.
According to an update he circulated to shareholders this month, Kano had been in discussions with Andreessen Horowitz, a prominent venture capital fund, about taking a $10m investment from it as part of an ongoing partnership with Kanye.
Mr Klein said: "When Kanye, post-Paris fashion week, chose to misdirect his personal and emotional frustration at the Jewish people, I called [Andreessen] and suggested that it would be difficult for me - I am half-Jewish - to move forward with the deal we had discussed.
"They recommended I talk to Kanye, perhaps see if I could change his mind, which I tried to do, with lengthy in-person discussions. They took a lot out of me. Unfortunately, I wasn't successful."
Mr Klein added that Kanye then "offered to become a 'silent' investor - to put up the $10m himself - and put forward his own term sheet".
He said he had ultimately rejected this proposal.
A crowdfunding campaign to raise just under £1m is now expected to launch this week.
Kano is also seeking funding from other investors, with Mr Klein understood to be open-minded about the scale of the fundraising.
A sale process in the event that the fundraising is unsuccessful is also being prepared.
Kano's flagship product, the STEM player, has been viewed more than 660 million times on TikTok, according to Mr Klein.
According to the recent update to investors, Kano had sufficient cash to last it until the end of this month.
Mr Klein said that in 2022, Kano recorded $3.5m in earnings before interest, tax, depreciation and amortisation, and $2.7m of net profit.
Partnerships with Justin Bieber and Metallica are under discussion, he added.
Sky News has learnt that Kano, which has refocused its business to focus on producing innovative music players, has appointed the advisory firm AlixPartners to work with it on sourcing additional financing.
The new capital is designed to fill a funding gap exposed by the collapse of its alliance with Kanye, the company's founder Alex Klein told investors recently.
The partnership with the musician was dissolved amid a furore over antisemitic comments he made last year.
According to an update he circulated to shareholders this month, Kano had been in discussions with Andreessen Horowitz, a prominent venture capital fund, about taking a $10m investment from it as part of an ongoing partnership with Kanye.
Mr Klein said: "When Kanye, post-Paris fashion week, chose to misdirect his personal and emotional frustration at the Jewish people, I called [Andreessen] and suggested that it would be difficult for me - I am half-Jewish - to move forward with the deal we had discussed.
"They recommended I talk to Kanye, perhaps see if I could change his mind, which I tried to do, with lengthy in-person discussions. They took a lot out of me. Unfortunately, I wasn't successful."
Mr Klein added that Kanye then "offered to become a 'silent' investor - to put up the $10m himself - and put forward his own term sheet".
He said he had ultimately rejected this proposal.
A crowdfunding campaign to raise just under £1m is now expected to launch this week.
Kano is also seeking funding from other investors, with Mr Klein understood to be open-minded about the scale of the fundraising.
A sale process in the event that the fundraising is unsuccessful is also being prepared.
Kano's flagship product, the STEM player, has been viewed more than 660 million times on TikTok, according to Mr Klein.
According to the recent update to investors, Kano had sufficient cash to last it until the end of this month.
Mr Klein said that in 2022, Kano recorded $3.5m in earnings before interest, tax, depreciation and amortisation, and $2.7m of net profit.
Partnerships with Justin Bieber and Metallica are under discussion, he added.