Beats Electronics, which makes colorful, pricey headphones branded by rapper and hip-hop mogul Dr Dre, has secured a minority investment from the Carlyle Group, a Washington, DC-based private equity firm. Carlyle is paying $500 million, reports the New York Times, valuing the music company at more than $1 billion.
The deal is the latest milestone and largest investment to date for Beats, whose signature Beats by Dr. Dre have seized a huge portion of the premium headphone market. HTC Mobile of Taiwan also agreed to sell its remaining 25% stake in Beats back to the company for $265 million.
Based in Santa Monica, California, Beats Electronics LLC was founded by music impresarios Andre Young, better known as Dr. Dre, and Jimmy Iovine, who serves as the companyâ€™s CEO. Beasts started selling headphones in 2008.
The company has grown rapidly in recent years as its signature headphonesâ€”which generally cost between $200 and $400 eachâ€”have captured more than half of the U.S. market, at 64%, for premium headphones, according to data from NPD Group.
Beats is on track to collect revenue of roughly $1.2 billion this year, up from less than $200 million in 2010. The company currently has about 360 employees, up from 30 less than two years ago.
Since inception, Beats has expanded its product base to include portable-speakers, audio systems for cars, laptops and mobile phones. Beats also has developed a streaming music service that could compete with the likes of Pandora Media Inc.
The companyâ€™ s mission is to provide a superior end-to-end music experience – with headphones, speakers, devices and services â€“ â€śso fans can feel the emotion and hear the music the way artists intended it to sound from the studio.â€ť
The Carlyle investment will further Beatsâ€™ push to become a global consumer-electronics company.