Quester portfolio company OD2 has been acquired by business-to-business digital media company Loudeye Corp for $20.7m in cash and shares with a further $17.5m over the next 18 months and a right to earn up to an additional $18.8m in upside.
Quester led the digital music provider’s first £1.5m round of investment in 2000 and led a further £4m round in 2002 alongside a group of investors including Japanese venture capital fund NIF.
OD2 has made significant progress during the investment period. In its Q4, ending March 31, 2004, OD2 generated around $2.5m in revenues, which represented over 80% growth from the quarter ended December 31, 2003 and over 250% growth versus the previous years’ quarter. Digital music download sales are expected to reach around $1.6bn by 2007 in Europe alone.