The Extraordinary General Meeting held by Utopia Music has prompted investors to take greater oversight of the company. This includes the appointment of a new Chair, with co-founder Mattias Hjelmstedt stepping down from this role but retaining his seat on the board. This move has been described as a “well-orchestrated coup” by a source close to the company.
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Existing investors in Utopia have agreed to inject a further €15 million into the business, but in return, they want more control and oversight, including additional board seats. The most significant board appointment requested by investors is that of a new interim Chair, Australian John Mitchell, CEO of Mitchell Asset Management and previously a Senior Vice President at Merrill Lynch. Greger Hagelin, Utopia’s long-time “Chief Relationship Officer” and founder of clothing brand WeSC, will also take a seat on the board.
This shift in leadership represents a significant development for the company, as co-founder Mattias Hjelmstedt steps back from his role as Chair. Earlier in 2023, Hjelmstedt assumed the day-to-day leadership of the company after CEO Markku Mäkeläinen stepped down. In October, Hjelmstedt stepped back from that day-to-day leadership role with the appointment of Alain Couttolenc as the new CEO.
Couttolenc has also brought in ex-Nielsen exec Fredrik Hedlund, who has held various SVP and CFO positions across the Nielsen portfolio and specializes in corporate finance, strategic investment, and investor relations. Another senior Swiss finance executive, believed to be a former UBS executive with a strong track record in corporate turnarounds, is set to join the company in a more direct, hands-on executive role.
These developments come as Utopia navigates a tumultuous year, facing divestments, lawsuits, and a significant reduction in headcount. The company also experienced the sudden liquidation of its UK and Finnish R&D divisions, causing discontent among former employees.
While 2023 saw a decline in the company’s fortunes, Utopia has made significant cost reductions to bring spending under control and develop a coherent strategy for break-even and onward profitability. Plans presented to investors indicate that while break-even may not be reached in 2024, it is expected to happen relatively soon after.
A syndicate of existing Utopia investors is preparing to inject €15 million into the business, with negotiations underway to bring in a similar sum from new investors. This renewed investment signifies confidence in the company’s new leadership team, despite ongoing legal challenges and the need to clean up the company’s balance sheet.
The company’s strategy for 2024 focuses on reaching break-even and onward profitability through top-line growth, rather than further cost-cutting measures. CEO Alain Couttolenc expressed gratitude for the ongoing support and emphasized the company’s solid foundation and great products.
In conclusion, Utopia Music is undergoing significant changes in its leadership and strategic direction as it works to overcome the challenges it has faced in recent years. With a renewed injection of funds and a clear focus on growth, the company is striving to turn the tide and achieve long-term success in the music tech industry.