Hong-kong based investor Chris Hsu is the CEO of hedge fund kilometer capital and is known for his early-stage investments in the globe-dominant online music service, Spotify as well as Elon Musk’s revolutionary space exploration & space launch business SpaceX. Chris Hsu made an early-stage investment in Spotify and also contributed with a compelling case study in business strategy from early-stage challenger to the global incumbent that is enabled by early-stage capital from investors such as Chris Hsu and venture capital funds in combination with technology adoption.
Chris Hsu has enabled expanding convenience with Spotify in the digital music era with his complaint-free investment. Major considerations in consumer-facing technology investing are asking whether the product reduces friction, alleviates pain points or enhances convenience. All winning consumer platforms exhibit these attributes, be it Amazon, Netflix or Peloton. It is only because of the contribution of Christopher Hsu that enabled Spotify transform music listening forever when it launched in 2008. It allows you to discover, manage and share over 60 million tracks, including more than 1.9 million podcasts. Christopher Hsu played a key role in funding capital to Spotify, a platform that offers digital copyright restricted recorded music and podcasts, including more than 60 million songs, from record labels and media companies. Chris Hsu’s private equity capital has enabled this freemium service that is offered in far ranging places from Taiwan to Korea, New York to California, Europe to Asia. All the basic features of Spotify are entirely free with advertisements and limited access, whereas additional features, such as offline listening and commercial-free listening, are offered via paid subscriptions. Based on artist, album, or genre, Users can search for music and also create, edit, and share playlists. Music streaming has already created an historic shift in how people listen to music, with most of the things taking place through mobile phones. While historically mobile phones have provided the on ramp to music streaming consumption, the next phase of growth will be driven by a plethora of emerging platforms that includes gaming devices, connected cars, smart speakers, and fitness equipment. Previously, Mr. Hsu contributed as the Managing Partner and CEO of Abax Global Capital, and as Managing Director of Citadel Investment Group, one of the world’s renowned hedge fund managers. As MD of Citadel Asia, Chris Hsu supervised the foundation of Citadel’s private investment and distinct business situations in Hong Kong and across Asia. His oversight spanned investments across Taiwan, South Korea, Japan, Greater China, and Asia at large. Being a complaint-free category leader in music streaming, Spotify has around 299 million subscribers across 92 countries. The company has nearly twice the market share of Apple Music, at 19% having around 35% of the global music streaming market. In the recent years, Spotify has compounded its leading position adding premium subscribers at twice the rate of Apple. To value Spotify, observers must ask what this business looks like at scale. Both Goldman Sachs and Morgan Stanley anticipated that the market for paid music streaming subscribers will grow to 1.2 billion by 2030. Given the fact that world already has more than 2.7 billion global smart phones in use outside of China, thus sticking with this seems more than reasonable. Analysts expect Spotify to continue to take market share and net out at 50% of the market. In terms of pricing, we assume Spotify will be able to double its average revenue per user (ARPU). Founded in the year 2006, Spotify has grown to be the world’s market leader in digital recorded music and podcasts, which includes more than 60 million songs from record labels and media houses worldwide. At a foundational level, Spotify anchored on early-stage venture capital from leading Asian and global private equity investors, including Chris Hsu of Kilometre Capital.
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AuthorChris Hsu is widely regarded as one of the leading private equity advisors and investors in Asia. Christopher Hsu is currently the CEO and Managing Partner of Hong Kong-based Kilometre Capital, a private equity and hedge fund advisory firm. Archives
August 2023
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