After splitting with Kanye West, British audio startup Kano asks for funding

British audio and computing hardware startup Kano is readying to rise equity backing from its users and fans, arsenic the institution tries to illustration a way guardant aft cutting concern ties with Kanye West, besides known arsenic Ye.

The steadfast volition motorboat a crowdfunding run connected Crowdcube connected Tuesday, Kano's CEO Alex Klein told CNBC. Ordinary users volition beryllium capable ain a portion of Kano alongside its organization backers, which see Microsoft and billionaire capitalist Jim Breyer's Breyer Capital.

It's seeking to rise $900,000 from idiosyncratic investors successful the U.K. and Europe. The institution besides plans to grow the crowdfund to the U.S.

Kano, which sells hardware targeted astatine musicians and creatives, has undergone a fewer melodramatic twists implicit the years.

Initially started arsenic a task to assistance kids codification with casual to physique machine kits, the steadfast has since moved overmuch of its absorption to processing audio products, the main 1 being its Stem Player, a puck-shaped instrumentality that lets users divided songs up into idiosyncratic tracks, similar vocals, bass, oregon drums.

Kano agreed tie-ups with large brands to motorboat a prime fewer products, including a Harry Potter wand users could customize done code, a Windows mentation of its modular Kano PC, and a coding kit inspired by Disney's "Frozen." It has since ceased accumulation of those devices, and nary longer sells immoderate of its products successful big-box retailers.

In 2019, Klein met with Kanye West, the disgraced rapper and instrumentalist who has been progressively ostracized from the concern satellite implicit his antisemitic remarks.

The 2 would spell connected to sermon the beginnings of what yet became the Stem Player. It was primitively named the "Donda Stem Player," a notation to West's 10th workplace album, Donda. Ye's 11th album, Donda 2, was released exclusively connected the Stem Player, connected Feb. 23, 2022.

Then came Ye's antisemitic outbursts. In October, West made respective harmful remarks astir Jewish people, including repeated attacks connected "Jewish media," invoking the antisemitic assertion that Jewish radical disproportionately power the media.

Those beliefs were expressed privately arsenic good arsenic publicly, according to Klein, who, successful an exclusive CNBC interview, recalls 1 of Ye's advisors saying the rapper couldn't spell done with a woody to get Kano "because 1 of the investors is Jewish."

"He was doing worldly that was conscionable disgusting," Klein told CNBC. "My dada is Jewish."

A lawyer from Australian instrumentality steadfast King and Wood Mallesons representing Ye was not instantly disposable for remark connected this communicative erstwhile contacted by CNBC.

Ye did not instantly respond to a reply asking him astir the connected the societal media app Parler, wherever helium past posted 2 months ago.

Ye verbally committed to acquisition Kano outright for $80 cardinal aboriginal past year, Klein said. A communal confidentiality statement shared with CNBC shows that, successful March 2022, the brace agreed to initiate exclusive woody talks.

Klein says helium was expected to negociate Ye's finances for him successful bid to seal the deal, an unorthodox petition successful deal-making terms. Klein says helium did look implicit Ye's finances but an acquisition didn't materialize, and each the advisors progressive were fired.

As the 2 went backmost to the drafting board, a consequent connection was made that would person seen Kano go a associated task named Yeezy Tech, funded with $10 cardinal from an extracurricular VC. Ye past projected a caller mentation of the deal, backed wholly by his ain cash. Faced with "worse" presumption and quality of Ye's antisemitic comments, Kano didn't accept, Klein said.

It wouldn't beryllium the archetypal clip Ye has engaged in, and past backed distant from, a tech institution deal. In October, Ye agreed to bargain Parler, an app associated with conservatives, for an undisclosed sum. That woody was "mutually" terminated successful November, according to a company statement to TechCrunch.

Despite caller outcry implicit Ye's antisemitic remarks, helium has often raised eyebrows. At October's Paris manner week, Ye donned a T-shirt with the racially delicate slogan "White Lives Matter." In 2016, the rapper expressed his enactment for erstwhile U.S. President Donald Trump and successful 2018 spent a stunning and surreal fractional hr talking to Trump successful the Oval Office.

Klein admits helium stuck by the rapper arsenic agelong arsenic helium did due to the fact that it meant being flush with superior and wide promotion. "$10 cardinal is simply a hard happening to crook down," helium said.

A simpler reason, Klein said, was due to the fact that helium considered Ye a "friend." Klein said: "On a quality level, I was like, this is simply a feline I've written lyrics with. This is simply a feline I've had large conversations with astir tons of topics. It was difficult."

Now, Klein wants to enactment the Ye debacle down him. Once its Crowdcube circular closes, Klein plans to put a important information of it into Kano's aboriginal products. It plans to motorboat a brace of achromatic headphones called the Stem Headphones, by the extremity of 2023 oregon aboriginal 2024.

The Stem Player, on with West's dedicated fanbase, drove large commercialized occurrence for the tiny London startup. The device, which starts astatine a retail terms of $200, has sold astir 100,000 units to date.

Kano eked retired a £1.6 cardinal ($1.9 million) nett earlier taxation successful 2022, the archetypal clip successful 3 years, according to unaudited financials shared by Klein with CNBC, a turnaround from a £13.7 cardinal nonaccomplishment successful 2021. Revenues grew astir 28% to £17.4 million.  

That has raised questions astir whether the concern tin proceed its occurrence post-Ye.