Pre-Unicorn Company That Restructured 60% of Staff... Can It Make a 'Spectacular Comeback'?

MyMusicTaste logo. [Photo by MyMusicTaste]

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[Asia Economy Reporter Lee Junhyung] MyMusicTaste, a performance planning startup once spotlighted as a ‘pre-unicorn’ (a private company valued at over 1 trillion KRW), laid off 60% of its employees last year. This was due to a sharp decline in demand for overseas performances caused by COVID-19. Since then, the company has sought new opportunities in the online performance business. With the phased recovery of daily life (With COVID) and growing expectations for the resumption of offline performances, attention is turning to the company’s future growth potential.

As a result of the restructuring, the company’s staff was reduced from 135 employees at the end of 2019 to about 50. Only a very small number of employees were able to gradually return to the company 8 to 9 months after the restructuring.

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MyMusicTaste was considered a next-generation unicorn startup. After researching demand data from K-POP fans, the company planned performances and recorded a cumulative investment of 25 billion KRW in 2017. At that time, the company secured a Series C investment worth 12.3 billion KRW, receiving a corporate valuation of approximately 100 billion KRW. In 2019, the Ministry of SMEs and Startups selected MyMusicTaste as a pre-unicorn alongside major startups such as Market Kurly and Watcha. This was the result of a ‘contrarian’ approach that viewed the performance planning market, which had been supplier-centered, from a consumer-centered perspective.

However, COVID-19 dealt a direct blow to the company. This was because its main business was planning overseas performances. Since global K-POP fans were the primary customer base and overseas sales accounted for over 95% as of 2019, the company was hit harder and faster by the pandemic than other domestic companies, especially as offline performances were successively canceled in overseas markets such as the U.S. and Europe, where COVID-19 spread relatively early. The industry estimates that 90% of the offline performance market disappeared before and after COVID-19. The company’s monthly sales at the beginning of last year shrank to the 10% range compared to usual.

Facing an existential crisis, the company pivoted its strategy. The online performance platform became the future growth engine chosen by the company. While maintaining the business model of organizing performances based on customer demand, the venue was shifted online. The company generated revenue not only through performances in the online space but also by holding fan sign events and selling albums and merchandise.

A concert by the band 'Hyukoh,' planned by MyMusicTaste, held in Moscow, Russia. It took place in March 2019, before the spread of COVID-19.
[Photo by MyMusicTaste]

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During this pivoting process, workforce restructuring was inevitable. This was because the company’s internal staff had been primarily organized around offline performance planning tasks. Since MyMusicTaste’s main business was overseas performances, most employees were responsible for practical tasks such as tour management. At the time of strengthening the online commerce business, there were not many personnel needed for new businesses such as developers. This workforce structure was also a reason why the company had to let go of many employees. CEO Lee Jaeseok of MyMusicTaste said, "Our financial situation was very bad in April last year," adding, "If we had not made the decision then, we would not have been able to guarantee salaries and severance pay later."

Thanks to the swift decision, the worst-case scenario was avoided. After a harsh restructuring period of two months starting in April last year, the company fully launched its online performance business in July of the same year. The results were not bad. As digital transformation accelerated due to COVID-19, resistance to online performances also decreased.

Lee Jae-seok, CEO of MyMusicTaste (left). [Photo by MyMusicTaste]

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The company planned 37 online performances from July last year to recently. Although last year’s sales were 19.2 billion KRW, about 25% less than the previous year (25.4 billion KRW), it was considered a decent performance given the impact of COVID-19. The company expects this year’s sales to be at a similar level to last year.

With With COVID, the company plans to develop both online and offline performance businesses as two tracks. It has also started raising investment for the first time in four years. CEO Lee said, "We recently opened Series D investment and are in discussions with several investors," adding, "We are focusing communication with strategic investors (SI) who can create direct synergy effects with the company."

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