September 2026
Five years ago, private equity discovered the music industry.
Goldman Sachs, Blackstone, TPG, Carlyle and others started placing bets across the ecosystem: distribution, music-making tools, publishing, events and music technology. Goldman Sachs' GS Growth backed Splice. Blackstone bought eOne Music and invested alongside EQT in Epidemic Sound. TPG invested in Musixmatch. Francisco Partners built a small music-tech portfolio around Native Instruments and Kobalt. The idea was common - find businesses sitting somewhere between technology and music, and capture the growth of a rapidly digitising industry.
Some funds found opportunities in the copyrights. But even more excitement came from digital businesses built around them.
Distribution could scale without adding a warehouse for every new artist. Music software could serve millions of users without manufacturing millions of physical products. Data, metadata, licensing and creator tools could become global businesses with software-like economics.
For a while, it looked like a pretty good party. And the party is not exactly over.
In 2026, CVC agreed to make a majority investment in DistroKid, with Insight Partners retaining a significant minority stake. Bridgepoint also committed capital to GoldState Music's new growth strategy, designed to invest across the music value chain. So private equity is clearly not running away from music.
But something else is starting to happen.The first investors who entered during the 2021–22 rush are reaching the point where they need to answer the least exciting question in private equity: When are you selling?
Francisco Partner has its answer
The technology-focused private equity firm entered music through Native Instruments in January 2021, taking a majority stake in the music-production hardware and software company. It later acquired a controlling stake in Kobalt in 2022 and backed the combination of Muse Group and Hal Leonard in 2023.
And now it is out of all three.
The exits are quite different. Native Instruments was acquired by inMusic in May 2026, after Native Instruments had entered insolvency earlier in the year. Kobalt was sold to Primary Wave in March 2026, with Brookfield investing alongside Primary Wave. And in June, Francisco Partners concluded its investment in Muse Group. Muse Group said the partnership had helped it more than triple in size and complete the acquisition of Hal Leonard. Francisco Partners' investment lasted only around two and a half years in this case.
Taken together, the three transactions are notable.
The firm continues to stay invested heavily in its 2021-2022 portfolio across software, healthcare, cybersecurity, education and other technology sectors. It is simply no longer invested in music.
We don't know the returns on the individual investments. The transaction values have largely not been disclosed, and the Native Instruments situation in particular makes the economics difficult to assess from the outside.
But we can observe something else: the portfolio has reached the point where the investor has decided to realise its positions. And that is what private equity eventually does.
The five-year clock
This is where the broader music-investment story gets interesting. A large part of the institutional money that entered music around 2021–22 did so when digital music was enjoying a powerful combination of growth, low interest rates, abundant capital and very optimistic technology valuations. Some were bets on recurring software revenue. Some were bets on creator platforms. Some were bets on music rights and publishing. Some were bets on businesses sitting somewhere between entertainment and technology.
But many of them shared a common assumption: music would continue becoming a larger, more digital and more scalable business.
Five years later, that assumption looks less controversial than it did then. The more difficult question is whether the returns generated by these businesses are good enough to justify the prices investors paid for them.
Consider some of the better-known deals from that period: Splice's 2021 round, for example, valued the company at close to $500 million, while Epidemic Sound's 2021 financing valued it at $1.4 billion. These businesses have had several more years to grow.
Now comes the fun part. At some point, somebody has to buy them.
Who leaves the party next?
Private equity has plenty of capital. It also has plenty of patience when the alternative is selling a good asset at an unattractive valuation. So the fact that a fund has held an investment for five years does not automatically mean it has to sell it. But private equity funds do have lives, investors expecting distributions, and new funds that need to be put to work. Eventually, the portfolio starts moving.
Francisco Partners may be an early signal. Investments into Splice, Musixmatch, UTC or Epidemic Sound are approaching a 5 year mark and can go on sale soon. Or maybe not.
The next few years should tell us whether the first generation of large institutional music investments produces a wave of exits and, more importantly, who buys them and at what price.
Five years ago, the big question was whether private equity would finally take music seriously. Now the industry gets to ask the slightly more uncomfortable question:
Was music actually a great investment or did everyone just really enjoy the idea of one?