Mr Eazi did not sell Vydia for $1 billion. Here's what really happened

April 25, 2023
4 min read
Mr Eazi. Source: Twitter

Author's note: 3:00 PM/April 25, 2023: This article has been updated with information that emPawa Africa did invest in Vydia, exiting after the sale and that Zagadat Capital has made investments into startups like Empawa Africa, betpawa, Paisa, Eden Life, Ruka Hair, Decagon, Apata, Turf, Shoobs, and Choplife Limited.

Last week, several reports emerged suggesting that Zagadat Capital, the investment vehicle of Nigerian entrepreneur and musician, Ajibade Oluwatosin, popularly known as Mr Eazi had received a windfall following the sale of Vydia to gamma. While some reports claimed Vydia is a Zagadat Capital portfolio company, others claimed it is owned by Mr Eazi, so what is the truth about all this? Let's find out.

What is Vydia? 

For starters, Vydia is a musictech company that helps musicians to manage, monetise, and distribute their art. The company, headed by Roy LaManna, was founded in 2012 and has raised more than $8 million since its inception. In December 2022, it was acquired by gamma, although the acquisition was only announced this year. The terms of the deal were also not disclosed.

Is Mr Eazi an investor in Vydia? 

According to publicly available records, neither Mr Eazi nor Zagadat Capital are investors in Vydia. Information on Crunchbase shows there are six investors in the startup. These include Newark Venture Partners, Vocap Partners, Pasadena Angels, Connected Ventures, QueensBridge Venture Partners, and Canyon Creek Capital. Similarly, none of the articles announcing Vydia's fundraises list Zagadat Capital as an investor.

Vydia's SEC filings, following its Series A, puts the number of investors at seven but given that Zagadat Capital was launched in 2021, two years after the Series A, there's very little chance that it is the seventh investor. Dealroom, however, lists eight investors, including Tech Council Ventures, Eastward Capital Partners, and Group 11. Either way, there are no mentions of Zagadat Capital or Mr Eazi. A search for Zagadat Capital's website doesn't turn up any results and its Twitter and Instagram handles have a grand total of three posts.

What is the connection to Vydia? 

While Mr Eazi isn't an investor in Vydia, the connection he has with the company is a partnership with emPawa Africa to launch Cinch Distro, a music distribution platform. However, a representative from emPawa Africa claims that emPawa Africa Ghana invested in Vydia in 2021, while a tweet from Mr Eazi seems to corroborate this.

So why am I seeing reports of a $1 billion deal? 

Many of the reports have suggested that the Vydia acquisition is worth $1 billion. However, that is highly unlikely given that Vydia's last fundraise was a $7 million Series A. Although its valuation was not disclosed and its financials are not available to the public as it's a private company, a $1 billion valuation is a big leap.

So what's the fuss about $1 billion?

This $1 billion is almost certainly a reference to the amount raised by gamma for its investments. According to a press release introducing gamma, the company aims to change the way artists create and distribute their music.

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The company which was founded by Larry Jackson, a former Apple Music Creative Director, has raised capital to drive its investments from investors such as Elridge — which many may know as the company owned by Chelsea owner — Todd Boehly, Apple Music, and A24.

The amount raised has also not been officially disclosed. While some reports say it is about or close to a billion dollars, others say the actual figures are way lower but there are no concrete reports about the exact figure.

So is Mr Eazi a billionaire?

Not nearly. While the musician and entrepreneur has done well for himself, it is highly unlikely that he is a billionaire. Zagadat Capital, his investment firm only has one publicly disclosed deal — an investment into fintech startup, Pawapay. Even then, Zagadat Capital did not lead the round. There have also been no indications that it has raised or is raising a fund to invest in more companies. The 32-year-old has other business interests including emPawa Africa and the African Music Fund but none of them is close to making him a least not yet. A representative from emPawa Africa, however, claims that Zagadat Capital has invested in Empawa Africa, betpawa, Paisa, Eden Life, Ruka Hair, Decagon, Apata, Turf, Shoobs, and Choplife Limited.

How do investors make money from the sale of a portfolio company?

If you're a regular reader of the Equity Merchants series, you're familiar with how investors recoup their investments in a startup. The three major ways this happens are by selling shares to another investor, a public listing, or through an acquisition. In each case, the firm or individuals that had invested in a company only get the equivalent of their investment. For example, if you own 3% of a company that was sold for $50 million, you would only receive $1.5 million.

Using a more popular example, when Paystack was acquired for $200 million, it had raised $10.4 million from 40 investors according to its SEC filings. This would mean that all investors and the founders owned specific percentages of the company. So an investor who owned 10% of the company would only have received $20 million. If the investor was a fund, the same applies but that won't be money that goes to any of the partners or employees of the fund since they have to return some money to their limited partners.


Based on publicly available information, neither Mr Eazi nor Zagadat Capital is an investor in Vydia and so cannot benefit from any sale regardless of the figures involved. However, emPawa Africa claims to be an investor through its subsidiary emPawa Africa Ghana.

Do you have other questions about this development? Drop a comment and we'll get you answers.

Accidental writer, covering Africa's startup landscape and its heroes. Find me on Twitter @chigo_nwokoma.
Accidental writer, covering Africa's startup landscape and its heroes. Find me on Twitter @chigo_nwokoma.
Accidental writer, covering Africa's startup landscape and its heroes. Find me on Twitter @chigo_nwokoma.

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