Back to basics: Where music tech money really flows
In 2024, music tech investment took an unexpected turn: The biggest checks went to the industry's least glamorous problems.
Gone were the splashy bets on metaverse concerts, blockchain-powered royalties, and avatar superstars. Instead, these kinds of deals captured the year's narrative:
- Private equity giant Hellman & Friedman took control of performing rights organization Global Music Rights for nearly $3B.
- Universal Music Group is spending $775M to acquire Downtown's distribution infrastructure (pending regulatory approval).
- Live operations company atVenu raised $130M to help venues sell merch, food, and beverages more efficiently.
The shift from hype to infrastructure reveals an industry finally confronting its operational reality: For all of music's “digital transformation,” its core systems remain surprisingly antiquated.
Today's artists can command stadium-sized LED displays but still track their ticket sales manually in spreadsheets. Streaming services process billions of plays while artists and rights holders navigate byzantine payment systems, often waiting months for accurate earnings data.
Music's technology story has always run on parallel tracks. Consumer experiences — streaming, social audio, virtual reality — grab headlines. Meanwhile, the essential scaffolding of rights management, ticketing, and distribution quietly powers the industry's core functions.
In 2024, that backend infrastructure finally became the main character. Many forces drove this pivot:
- The post-pandemic live music boom exposed operational breaking points. As tours returned at unprecedented scale, dated tech systems and business models buckled under the pressure.
- A more cautious investment climate also demanded clearer paths to revenue. Instead of costly experiments with Web3 and metaverse plays, capital gravitated toward companies solving tangible, revenue-generating problems.
This report analyzes 140+ investments and exits across 38 countries from 2024, mapping capital flows that reveal music tech's new priorities. We explore:
- Why established businesses handling unglamorous problems are attracting unprecedented investment
- How venture capital, private equity, and strategic investors are carving out distinct niches
- Where infrastructure gaps create opportunities for entrepreneurs
- What accelerating consolidation means for every industry stakeholder
The story that emerges is less about reinventing the music business per se, and more about making its existing machinery actually work.
Methodology
Our analysis draws from a proprietary database of 2024 music tech investments and exits, compiled in the first week of January 2025.
We define “music tech” generously, as the tools, platforms, and services that power how music is created, distributed, monetized, and experienced. This expands the scope beyond creation and production tools, into areas like ticketing, sync licensing, marketing analytics, artist financing, and much more.
We verified each deal through multiple sources:
- Public company financials and SEC filings
- Official company communications (e.g. blogs, press releases, social media posts)
- Third-party investment databases (e.g. Crunchbase, Tracxn, PitchBook)
- Industry media coverage (e.g. Billboard, Music Business Worldwide, Music Ally, TechCrunch)
While we strive for comprehensive coverage, this report inevitably represents a partial view of the music tech investment landscape. Private market data is inherently incomplete; many deals go unannounced, and crucial details like valuations often remain confidential.
Our coverage also skews heavily towards North American and European markets, which together account for 76% of deals and 78% of investors in our dataset. This reflects both our network's current reach and the broader challenges in tracking deals across emerging markets. Our deal coverage is particularly limited in regions like Southeast Asia, Africa, and Latin America.
2024 by the numbers
All in all, we tracked:
- 110 investment deals totaling $978M (for comparison: Music Ally’s tally for 2015 was 36 deals totaling $1.76B)
- 39 exit deals worth $7.3B combined
- 204 active investors
- Deals across 38 countries in 6 continents
Out of our investment deals:
- 46% are pre-seed or seed-stage — i.e. in the earliest stages of developing a product and establishing product-market fit. While this cohort is large, it accounts for only 12% of capital deployed. Examples include makromusic ($15M), Udio ($10M), DISCO ($10M), Turntable Labs ($8.2M), and Groover ($8M).
- 15% are strategic — i.e. direct investments from music and media companies aimed at achieving specific business goals, rather than just outsized returns. Key strategic deals include those in GMM Music ($70M from Tencent), Anghami ($12M from OSN Group), Condense ($0.6M from BBC Ventures), RealCount (undisclosed sum from Chartmetric), and Weverse (undisclosed sum from UMG).
- 5% are Series B or growth-stage — i.e. for more mature companies with proven business models to accelerate market expansion, product development, and team building. While rare in 2024, this tier commanded 48% of total capital. Top late-stage deals include those for Create Music Group ($165M), atVenu ($130M), Suno ($125M), and Duetti ($114M).
Out of our exits:
- 42% are full acquisitions — i.e. a complete purchase of a company's shares and operations, where the acquired company typically becomes a subsidiary or integrated division of the buyer. Key examples include: Bronze’s acquisition of Chroma, SESAC’s acquisition of Haawk, and Sony Music’s acquisitions of Fansifter and Songwhip.
- 21% are staged acquisitions — i.e. multi-step purchase agreements where the buyer acquires the company in phases, sometimes tied to performance milestones or earnouts. Key examples include UMG’s acquisition of [PIAS], Sphere Entertainment’s acquisition of HOLOPLOT, and Saregama’s acquisition of Pocket Aces.
- 8% are majority acquisitions by private equity firms — i.e. where an investor takes a controlling stake (over 50%) while leaving some ownership with existing shareholders. Key examples include New Mountain Capital’s majority acquisition of BMI, PAI Partners’ majority acquisition of Audiotonix, and Hellman & Friedman’s majority acquisition of Global Music Rights.
- Only 1 is an IPO — namely, Triller’s reverse merger with AGBA, a Hong Kong-based financial services firm. Triller is now listed on the Nasdaq exchange under the ticker ILLR.
Looking ahead, we're actively expanding our global coverage, particularly in Southeast Asia, Africa, and Latin America. We welcome input from our community to help paint an even more complete picture of music tech's worldwide evolution.
Bird’s-eye view: “Boring” is back
The early COVID pandemic unleashed a wave of experimentation in music tech, with investors pouring capital into consumer-facing products like virtual concerts, blockchain platforms, and social audio. The industry was essentially throwing ideas at the wall, trying to figure out what a purely digital music economy might look like. This experimental spirit peaked in 2021, when blockchain/crypto and livestreaming platforms dominated music startup funding.
In 2024, that script flipped entirely. Feverish experimentation gave way to a more grounded focus on what actually makes the industry tick. And now, the "boring" backend categories are stealing the show.
According to our data, rights management and live music tech are outpacing buzzier areas like generative AI in terms of capital raised ($222M and $194M vs $172M, respectively), and are all on par with each other in terms of deal volume.
In contrast, streaming, discovery, and curation platforms — once the darlings of the industry — are no longer in the top 5 categories by capital raised or deal volume. Categories like Web3, metaverse, and livestreaming that dominated headlines in 2020–2021 have plummeted all the way to the bottom 10.
The rise of core industry functions to the top suggests that investors are prioritizing practical solutions that strengthen music's operational backbone, over those that promise to reinvent consumer experiences.
Rights: Following the money trail
Rights and royalty infrastructure drew significant investor attention in 2024, leading the year's funding by total capital raised ($221.8M) and landing in the top 5 categories by deal volume. Many of the year’s top exits also involved private equity firms taking control of rights companies, including Hellman & Friedman’s $3B of Global Music Rights, New Mountain Capital’s acquisition of BMI, and EQT and TCV’s co-ownership of Believe.
The challenge is deceptively simple: While streaming transformed how we consume music, the systems for tracking, collecting, and distributing royalties remain fragmented and inefficient. But unlike previous waves of investment that promised wholesale disruption, 2024's funded companies took a notably pragmatic approach.
Three distinct strategies emerged:
Automation for the real world
Revenue leakage in today's music ecosystem isn't about massive oversights – it's death by a thousand paper cuts. For emerging artists especially, value disappears across dozens of easily overlooked income streams. Companies like Mogul are tackling this head-on, replacing manual royalty audits with automated "desk audits" that continuously scan for missed income across the fragmented landscape of streaming and distribution.
The tech x rights hybrid play
Many of 2024's largest deals went to companies that paired technological innovation with strategic rights ownership. Create Music Group's $165M raise from Flexpoint Ford (at a $1B valuation) exemplifies this approach, using sophisticated tech tools to both acquire and manage catalogs like Ostereo and Enhanced. Similarly, Duetti secured $34M in equity financing plus $80M in ABS to build data-driven tech for pricing and marketing artist catalogs, while simultaneously acquiring them.
AI attribution
A new wave of startups including Human Native AI, ProRata.AI, and Wavelets is racing to solve music's newest rights frontier: AI attribution and content detection.
But here's the warning sign: This enthusiasm eerily echoes the Web3 era, when blockchain was pitched as rights management's silver bullet. Both waves face the same fundamental challenge – you can build sophisticated technology, but it's only as good as your underlying rights data. And the music industry's historical struggles with rights data quality won't be solved by emerging tech alone.
The real test for these funded companies won't be technological innovation, but rather their ability to navigate music's complex rights landscape while delivering practical value to rights holders. In an industry where even basic ownership information can be contested, sometimes the most valuable innovation is simply making existing systems work better.
Live: From moonshots to modernization
Remember when virtual concerts were going to revolutionize live music? COVID-era investments poured into companies like Wave, MelodyVR, and Moment, all promising to reinvent the concert experience through immersive technology.
But that forced experiment in digital transformation revealed something far more fundamental: The live music sector was missing critical technological infrastructure across its core operations. While streaming had transformed recorded music over the last decade, live entertainment's operational backbone remained stuck in the spreadsheet era.
This realization, combined with the dramatic return of in-person events post-pandemic, triggered a dramatic shift in investment focus. In 2024, funding moved decisively away from metaverse experiments and toward companies solving live music's most pressing operational challenges.
The result? Live music tech captured the second-highest share of both deal volume and total capital ($194M) across all music tech categories.
Three key investment themes emerged:
Operations at scale
The sector's largest deal tells a revealing story: atVenu secured $130M from Sixth Street Growth not by promising to reinvent live music, but by solving the surprisingly complex challenge of merchandise and F&B operations. Meanwhile, companies like Eventric and RealCount raised capital to modernize tour planning and analytics — areas where even stadium-filling artists still rely on manual data entry.
Next-gen ticketing
New ticketing platforms like Billy and Posh are carving out specific niches — building specialized solutions for indie venues, emerging artists, and niche communities that need more tailored approaches than what industry giants provide.
Immersive tech 2.0
The few virtual experience investments in 2024 signal a more mature approach to innovation. Deals like Condense’s raise via BBC Ventures and Sphere’s Holoplot acquisition suggest big players now view immersive technology as complementary infrastructure rather than a standalone product – just one piece in live entertainment's broader technological evolution.
This shift from digital moonshots to operational modernization reflects the investor stance that transforming live music may require strengthening its foundation first.
AI: beyond one-click wonders
While generative AI dominated 2024's music tech headlines, the investment story runs deeper than viral demos and one-click music generation. The sector secured over $170M across 20+ deals, landing solidly in the top 5 categories by investment. But it's where and how this capital flowed that reveals the real transformation underway.
AI has effectively become music tech's new frontier for emerging technology investment, eclipsing previous focal points like Web3 and metaverse development that have receded into the background.
Perhaps more tellingly, AI has also reshaped the creative tools landscape entirely: Our data shows that 15 out of 17 funded creator-tool platforms in 2024 (representing $143M in investment) are fundamentally AI-native — i.e. designed from the outset with AI features at their core. This marks a dramatic shift from 2020, when AI was a fringe player in music tech portfolios and creation tools centered on traditional production approaches.
While Suno's landmark $125M raise perhaps captured the most attention (and the most lawsuits), 2024's more compelling narrative lies in the emergence of focused, workflow-specific AI solutions across music's value chain:
- Beatoven (background music generation)
- AudioShake (professional-grade stem separation)
- CRESQA (automating music marketing & content creation)
- RoEx (mixing & mastering)
- Hook (social-first remixing)
- Human Native AI, ProRata.Ai (AI attribution)
Support for AI development is also diversifying beyond traditional venture capital. Government initiatives like Innovate UK and corporate initiatives like the ASCAP Lab and Sony Music UK’s Black Founders Programme are creating alternative development pathways and hybrid capital opportunities for AI founders.
Overall, the investment patterns of 2024 suggest that tomorrow's AI winners won't be crowned based on technological prowess alone. The most promising ventures are those that deeply understand music's complex ecosystem, and can thoughtfully embed AI capabilities within existing industry workflows and relationships. The question isn't just "What can AI do?" but rather "How can AI make music's core business processes work better?"
Runner-up categories
Music education
Music education has enduring, timeless appeal — two-thirds of Americans have learned an instrument at some point in their lives — making it a potentially attractive area for investors.
A key trend to watch is how the sector is evolving beyond just teaching scales and chords into a strategic channel for artist engagement, as exemplified by deals like Duolingo’s licensing deal with Sony Music and Billie Eilish’s partnership with Yousician.
This evolution has attracted fresh capital to startups like Moombix and Sirius, signaling investors' recognition that education is becoming a legitimate revenue stream in the modern artist business model.
Collaboration
The collaboration space saw targeted momentum in 2024, highlighted by [untitled]'s $18M Series A from a16z and Highnote’s $2.5M from Dropbox Ventures. Specialized players are also emerging to tackle specific pain points, such as real-time virtual sessions (Submix), audiovisual editing (Pibox), and studio/producer booking (EngineEars).
While business model challenges persist, the sector's natural network effects are particularly compelling: When one creator adopts a platform, their entire collaborative ecosystem tends to follow. The convergence of mobile-first and AI-first workflows suggests significant untapped potential from a product perspective as well.
Fan engagement
Universal Music Group's identification of direct-to-fan as their fastest-growing segment validates what many industry observers have long suspected. Market conditions — plateauing streaming growth, escalating touring costs, and artists' urgent need for direct fan relationships — have created perfect timing for fan-centric platforms to rise. This momentum drove 2024 investments in platforms like Weverse, Levellr, Mellomanic, and FanCircles.
Yet the space faces a critical challenge around attention fragmentation. MIDiA Research's engagement data reveals a stark reality: Niche social platforms rarely exceed 10% weekly active use, while established networks maintain 60%+ engagement.
This suggests the real opportunity lies not in launching new standalone platforms, but in building tools that enhance existing fan relationships while solving the growing challenge of scattered fan data.
Discovery & curation
While discovery technology no longer commands the attention it did in 2018-2020, we're seeing an intriguing shift toward social, interactive experiences. This evolution attracted capital to platforms like Rythm, Hangout, and Factory.fm in 2024. Hangout’s strategic partnership with all three major labels particularly stands out, signaling incumbents’ growing comfort with social listening models.
The winners in this space will likely be founders who can build sticky communities while navigating both music licensing complexities and sustainable monetization demands.
How capital is evolving
The traditional view of music tech as a niche, complex investment has given way to something more nuanced. In 2024, we saw investors developing sophisticated strategies to capture value across music's evolving technology stack.
The market is crystallizing around three compelling investment narratives:
Pure tech players
Companies like Suno and Distrokid are following venture capital's familiar blueprint — building scalable software that transforms how the industry works, without touching rights ownership. Inherent in the pitch is the promise of massive scale within 7–10 years.
Over 100 VC firms backed music tech startups in 2024 — ranging from sector-agnostic giants (Andreessen Horowitz, Lightspeed Venture Partners) and corporate VC arms (Dropbox Ventures, BBC Ventures), to a wide range of specialists in entertainment (Triptyq Capital, Crush Ventures) and fintech (Nyca Partners, Robot Ventures). Together, these VCs drove nearly 40% of the sector's capital deployment.
Tech-enabled rights businesses
A second category is emerging: Companies that look like traditional music businesses on paper but operate like sophisticated technology platforms under the hood. They're using proprietary tools to maximize the value of music rights — and attracting a different kind of capital in the process.
Duetti exemplifies this hybrid approach. Their 2024 fundraise split into two vehicles: $34M in growth equity for technology operations, and $80M in asset-backed securities for rights acquisitions. This structure speaks two financial languages simultaneously, matching different types of capital to different parts of their business.
This model particularly appeals to private equity firms, who see an opportunity to apply technical efficiency to music's predictable streaming economics. When Flexpoint Ford invested $165M in Create Music Group, they weren't just buying rights — they were betting on Create's ability to use technology to extract more value from those assets.
Strategic capital gets sophisticated
A long list of record labels (UMG, WMG, Sony Music), music tech companies (Songtradr, UnitedMasters, Chartmetric), and media conglomerates (Tencent, Kakao) made their own investments in music tech startups in 2024. These are known as strategic investors — established entities that invest in startups in their sector not only for financial returns, but also to gain synergistic business advantages such as tech integration, market expansion, and improved competitive positioning.
Rather than making scattered bets, strategic investors in 2024 built out comprehensive tech portfolios that both strengthened their core operations and opened new growth vectors.
Universal Music Group's aggressive 2024 moves illustrate this approach. Their acquisitions of Downtown, [PIAS], and Outdustry, plus investments in Weverse and NTWRK/Complex, all point to systematically integrating independent music infrastructure across borders. Other major labels are catching up, with Warner Music Group’s investments in Sua Música and Skillbox and Sony Music’s acquisitions of marketing analytics startups Songwhip and Fansifter.
The key insight is that music tech's funding landscape is maturing. Success arguably no longer means choosing between being a "tech company" or a "music company." It means building tech businesses that work with music's unique dynamics, not against them.
Future outlook and implications
The chess pieces are already moving for 2025's defining deals:
- DICE and SoundCloud are both exploring a sale.
- Epidemic Sound's IPO aspirations signal growing investor appetite for B2B music services.
- The independent music sector looks particularly ripe for consolidation, with several distributors exploring strategic options as major labels and financial players circle the space.
- 2024's AI funding frenzy faces a reality check. As the dust settles, expect infrastructure players to start absorbing AI startups — looking less for standalone products, and more for technical capabilities they can integrate into existing service stacks.
- A fascinating case study is unfolding in Australia, where Vinyl Group is quietly architecting what could be music's next operating system. Their methodical acquisition strategy — spanning NFT platform Serenade, media outlet Mediaweek, and several other tech and media services — suggests a new species of music company: Specialized holding groups that own and operate multiple layers of essential infrastructure.
Three strategic questions for 2025
Sustainability in a squeezed market
Traditional revenue engines — streaming and touring — face increasing pressure from rising costs and plateauing growth. This forces a critical question: How do we build sustainable businesses when core revenue streams are compressed?
The answer likely lies beyond simple revenue diversification. Companies need to identify genuine inefficiencies where technology can reduce costs or unlock trapped value. This is particularly relevant for companies targeting consumers, fans, and even artists, where enthusiasm for new tools often outpaces willingness to pay.
Navigating consolidated infrastructure
The aggressive consolidation of music's backend infrastructure creates a complex strategic calculus for both startups and established players.
Can independent providers still carve out defensible positions as majors absorb more infrastructure? The opportunity may lie in identifying highly specialized problems that larger players can't efficiently address, rather than competing for broad market share.
Finding sustainable scale
A crucial pattern is emerging: Success doesn't necessarily require massive scale. Companies solving focused problems for specific segments (like atVenu's laser focus on venue operations) are attracting significant capital.
This suggests the future may belong as much to specialized players who deeply understand particular workflows or communities, as to those pursuing broad platform and rights plays. The key is finding the right balance between addressable market size and operational focus.
These questions point to a broader strategic imperative: The next phase of music tech won't be won through technological innovation alone, but through deep understanding of where and how technology can make music's complex ecosystem work better. Companies that can thread this needle — matching specific solutions to genuine market needs while building sustainable business models — will likely emerge as 2025's winners.
Revisit Water & Music’s previous research on music startups and investment: