For investors

IPR.VC: Targeting Untapped Content Investments

  • IPR.VC is generating returns for its investors through investing in European filmed entertainment – TV, film and interactive content – a sector with little exposure by VC funds due to its specialized nature.
  • IPR.VC’s investment instrumentation provides fast capital rotation, downside protection and low overall costs for its funds. IRR target is 21% (net). The strategy enables mezzanine risk level at VC class returns.
  • Fund I has verified IPR.VC investment strategy and serves as a basis for Fund II strategy. Target size for Fund II is €60m.
  • Media and entertainment industryis not correlatedto typical macro-economic drivers or to stock exchange fluctuations.

Media and entertainment industry is a $1.9tn growth industry that is going through a major transition. The transition is caused by Internet distribution and changing media consumption habits and it opens up major new opportunities and brings new winners. It is estimated to be enjoying a 5%+ annual growth in the coming years. Media content – TV, film – has become a key differentiator in media and entertainment business leading to growing demand of premium content.

While venture funds have been actively investing in media technologies, leading often to rising valuations, media content has not yet attracted VC investments in a large scale. Media content is the growth business that IPR.VC is focusing on and it is this focus that brings IPR.VC funds proprietary deal flow, which technology funds do not cover.

In addition to investment in company equity our instrumentation allows investing in content IPR equity (intellectual property rights). This complies with the TV and film industry investment practices and simultaneously brings the IPR.VC funds a VC-fund-like upside with mezzanine-like risk level.

Unlike most media industry investors who invest in media technology and platforms, IPR.VC is investing in scalable, cross-media products, which can be licensed and transferred for other delivery channels and interfaces, and which can be modified and licensed for new purposes. This is a huge, underserved market.

The Fund follows the best practices of Invest Europe’s recommendations for Governing and Reporting Principles which have been widely used in private equity and venture capital industries. Investments are reported at fair value according to IPEV Valuation Guidelines. Reporting to investors follows Invest Europe’s professional standards. Reporting is done quarterly at a minimum to the Fund Investors (LPs). The Fund I investors are all Finnish companies or institutions.

Here are some key trends we see in the media and entertainment market:

  1. Disruption not over yet: complex distribution chain with many different partners likely to lead to consolidation eventually, but creating unseen demand for original content. IPR.VC is ready to take advantage of the great demand and high prices being paid for content.
  2. Rise of global on-demand TV services. Subscription-based video-on-demand services (SVODs) attract consumers with an easy pricing scheme, flexibility from the television screen and highly compelling content. In this way, they challenge traditional advertising-funded and pay TV channels. Major SVOD services such as Netflix and Amazon Prime invest annually billions of euros in content and are attractive buyers also for IPR.VC’s investments.
  3. Increasing role of video and mobile content. Video is winning over text-based media and video is more and more often consumed on mobile devices especially within the youngest demographics.
  4. European Digital Single Market and its effect on content business models. Europe is being developed into a real-world common market also for the content industry. In today’s content business, there is a vast number of nationally operating content producers that have the potential to succeed in international markets.
  5. Virtual reality (VR) in gaming and video content. VR will enhance gaming and video viewing experiences and thus open new markets for content; however, device penetration is still at low levels.
  6. Artificial intelligence (AI) in content discovery and content creation. As AI technologies develop, we will see also content services that are AI powered.
  7. M&A activity rising. M&A activity in media and entertainment content business has been growing especially in TV production and video games.

IPR.VC Fund I invests in films, TV, games, and music. The 20M€ Fund will be fully invested before early 2019. Fund I has verified IPR.VC investment strategy and deepened the team’s insight of the market; these serve as a basis for Fund II strategy.

IPR.VC Fund II (target size €60m) will target:

1. TV content: TV, Internet video and animation

2. Film

3. Interactive content: VR, AI-based content, e-sports, IP-based video games, in-car media etc.

The information contained here on IPR.VC website does not constitute a distribution, an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction, in which such distribution of offer is not authorized to any person.