How BigHit managed to debut boy band
Songwriter and producer Bang Si-hyuk initially worked for JYP, one of the three biggest entertainment agencies in Korea. He set up his own label named BigHit Entertainment in 2005.
For the next few years, the new agency struggled to remain afloat and was near bankruptcy a few times.
Bang got some breathing room in 2011 when venture capital company SV Investment gobbled up a third of BigHit stocks for 3 billion won ($2.6 million).
For the next full year, BigHit spent the money to make various unprofitable contents, which put the company on the brink of bankruptcy again.
Back then, the Seoul-based agency’s valuation was almost nil as SV Investment CEO Park Sung-ho recalls.
Instead of giving up BitHit, SV Investment funneled 1 billion won more to the embattled outfit to spearhead another 4 billion won round of funding in 2012.
The result: BigHit debuted a seven-member boy band named BTS in 2013, and the two rounds of investments proved to be a jackpot.
Even compared to The Beatles, BTS has found immense fame not only in Korea but also in the West to become the world’s biggest boy group.
The septet dropped its latest studio album “Map of the Soul: Persona” this April to reconfirm its status as the most popular and successful pop act.
Its agency BigHit also chalked up ultra-fast growth as both revenue and net profit soared during the past several years. Its valuation is believed to be around $1 billion now.
“We invested 4 billion won in BigHit Entertainment, but its value once fell below $4. But we recouped more than 100 billion won, or 27-fold our initial investment,” SV Investment chief Park said in a recent conference on venture start-ups.
He added that SV made the investment based on the belief on Bang’s ability as a composer and producer.