Tesco has purchased digital music site We7 for a reported £10.8million, as the supermarket giant moves further into the entertainment market.
The company has bought a 91% stake in the London-based website and plans to complete the purchase of the remaining shares in the next few weeks, reports the Guardian.
Genesis frontman Peter Gabriel is expected to pocket a cool £2million from the deal, as he has shares in We7. He founded the company with Steve Purdham in 2007.
Speaking to The Guardian about the takeover, Purdham said: “Initially, it’s business as usual but, given what they’ve got, there’s great opportunities; the real one is access to their wealth of consumers and marketing.
“Building a technology startup is always a difficult thing but it’s the persistence there and the ability to create value. It’s just another example of how good UK tech can be. There are good people like Tesco out there that look for innovation and new ways of doing things.”
Mark George, Tesco’s digital director, said: “Customers and technology together are transforming the way we listen to music.
“Tesco is already one of the UK’s largest retailers of CDs; this move will help us offer a greater choice for the growing number of customers who want to access music instantly on any device, whenever and wherever they want. We7 has a great team and a good technology platform from which we can launch a range of digital music services in the future.”
We7 has a database of 11million digital tracks and is available on iPad, iPhone and Android devices. While the site has never made a profit, Tesco hope to change that by incorporating the site with their existent digital products.