The most active venture capital firms in music in 2020

The latest members-only database features a list of startups building online marketplaces that connect artists with event organizers and bookers. My impression is that most of these startups are trying to “disrupt” booking agents and/or venue promoters, at least on the level of independent and unsigned artists.

I’ve found 14 such startups. For each, I’ve included the following information:

• Their geographic focus (most of these companies focus only on a specific country or market)
• Their business model (most of them take a minority commission on the final artist booking fee)
• The extent to which artist fees are immediately transparent, i.e. whether an artist’s starting price and/or a venue’s budget is listed clearly on their own profile or gig listing (this is split 50/50 among the companies on my list)
• Whether the platform offers hands-on concierge services for artists and/or venues (at which point they arguably become the very company they initially tried to “disrupt”)

If you want to jump right in to the database, you can scroll down to the bottom of this post to access the password-protected link to the database on Airtable.

If you’re interested in reading more about the context, disclaimers and takeaways behind this database, please read on below. Otherwise, you can browse the full list here:

Context

As you may have already seen, one of my goals for 2020 is to cover the live music industry more often — given that it’s both an increasingly important component of many artists’ careers and bottom lines, and a complex, fragmented network of actors whose incentives few fans, let alone music-industry professionals, may truly understand. (As an aside, it’s also a more important time than ever to be an expert on the live music industry in the wake of all the cancellations around the coronavirus outbreak.)

So far this year, I’ve written pieces about the challenges of innovation in the ticketing sector and how booking agents use (and don’t use) data. I compiled this latest database below as part of the research process for a third article I’m working on about the extent to which technology can disintermediate booking as a whole, by matching supply more efficiently with demand.

As I wrote in my piece on booking agents and data:

“The number of venues around the world has not grown at nearly the same rate as the number of artists who have cultivated enough of an audience to fill those venues. As a result, booking is more competitive than ever, with many agents reaching out even to 250-cap rooms half a year or longer in advance.”

Both the supply and demand sides of this equation face challenges that could hypothetically be solved by a marketplace-type startup. Venues have to navigate a much noisier landscape of artists nowadays, and could benefit from a tool that filters artists based on venues’ target genres, audiences, interests and/or artist career stage (the same way that influencer marketing platforms for brands like inzpire.me work). In turn, artists and managers could save a lot of time on booking and outreach by whittling down venues in given markets to the ones that best fit their own target audiences, interests and genre affinities — which could also help these artists make better pitches to venue owners that outperform their competition.

Another trend that inspired me to look into booking-marketplace startups is the rise of promoters leveraging non-traditional event venues — hotels, boutique clothing stores, cruises, office spaces, apartments, living rooms, basements, etc. — that are already being enabled by companies like Sofar Sounds and Airbnb. As of now, there’s no resource that gives these non-traditional promoters access to a reliable supply of artists looking for these kinds of gigs; the outreach and booking processes remain low-tech and use up a lot of manual, human energy and labor.

Unsurprisingly, though, it’s much easier said than done to solve these kinds of problems with technology. Virtually none of the startups on my list have expanded beyond a few countries, and from my experience they haven’t been adopted by most artists or venues on a regular basis.

Disclaimers

My list is limited mostly to music-specific event marketplaces. The one exception is LÜK Network, which targets the fashion and beauty industries and connects content producers on the one hand with models, photographers, makeup artists and stylists on the other hand. I’d be interested to see any marketplaces that include comedians, magicians, dancers or other kinds of entertainers on the supply side.

As of now, there are also no startups on my list that operate in Asia, Africa or Latin America. If you know of any such startups in those markets, please holler!

Initial takeaways

1. Curated event marketplaces might be better than totally open ones.

Based on my preliminary research of this space, I think there’s a strong case for these event-marketplace startups to curate both supply and demand carefully early on, instead of making their offering totally open and self-serve from the outset. Otherwise, they will just add to the very noise that they’re trying to remove.

For instance, I’ve found that a large portion of artist profiles on some of the more open marketplaces are incomplete, or have not been regularly updated and maintained by their respective artists in months. This does not create a smooth or trustworthy user experience for venues and event organizers, who in turn will also use the platform less often because it adds little meaningful value.

Same goes the other way around: On these open platforms, any of you reading this article can post a spam gig in a matter of minutes, which creates noise that isn’t helpful for artists, who will then use said platform less.

In addition, these startups could do well to curate venues and event organizers that will be looking for artists to book at a higher volume (e.g. hotels or restaurants with weekly performance slots in their lobbies or bars, or corporate organizers with regular private parties), instead of a lower volume (e.g. galas or festivals that take place only once a year). This ensures not only a regular inflow of opportunities for artists, but also repeat business for the platforms themselves, which is important for keeping them sustainable.

2. Total fee transparency might be uncomfortable for some artists and venues.

For around half the companies on this list, artist fees and venue budgets are made almost completely transparent from the outset, leaving little to no room for negotiation.

Using Gigital as an example: one high-volume venue client — the Clarion Hotel Sign in Stockholm, Sweden — indicates that their budget for each jazz duo or trio performing in their weekly Saturday Jazz Brunch series is “up to 6,118 SEK” (around US$634).

As a verified artist on the platform, you can also set your minimum budget:

On the one hand, disclosing prices from the outset can be really effective in expediting and streamlining the matching process between artists and venues, let alone the booking process as a whole.

On the other hand, it would understandably be uncomfortable for a lot of artists to make their starting prices available to the general public — as that means they will probably end up underpricing themselves, as other artists see that information and start to charge more premium fees in their own, closed-door deals.

Also, many venue deals in general involve paying the artist not just a flat fee, but also a percentage of backend revenue after ticket sales reach a certain agreed-upon floor (e.g. a flat fee plus 10% on the backend after $___ in sales). Such clauses also give artists and venues additional incentives to ensure that the event is a success. The vast majority of the event-marketplace platforms on my list don’t allow for this level of contract flexibility.

3. Artists normally treat venues as intermediaries; these marketplaces compel artists to treat venues as customers.

I’ve been thinking a lot about how the notion of artists “serving a market” is relatively rare — as many artists think to serve themselves first creatively, and to focus on their own self-expression in their work, before necessarily addressing an external market need.

The concept of an event marketplace requires artists to think primarily about external rather than internal needs, especially if they are really intentional on getting as many opportunities from a given marketplace as possible. In particular, the venue in these contexts is seen as the customer — whereas previously the venue might have been treated more as a friendly intermediary between the artist and the actual customer, the fan.

The framing of the venue as the customer is especially salient in instances where the venue is a hospitality brand, such as a hotel, that is looking for artists who fit a certain kind of “vibe” or aesthetic. In that case, they have similar needs to those of any brands looking for artists to partner with on sponsorships and endorsements.

4. Many companies that try to “disrupt” booking… end up becoming the bookers themselves.

In the past, I tweeted about how a common trend in music-tech is that startups claiming to disintermediate and “disrupt” major music companies and “free” artists’ careers end up simply becoming B2B products for those incumbents, out of desperation for money.

I’m starting to see that same trend happening in the event-marketplace ecosystem. In my database, you’ll find two columns indicating whether or not each marketplace offers a hands-on “concierge service” for artists and venues. For now, it’s rare, but the existing services are still worth studying and scrutinizing.

Some key examples include Encore‘s concierge service, which offers one-on-one help to venues and event organizers who need assistance finding the right artists on short notice, for an additional 15% commission on top of the existing 20% commission on the final artist booking fee (according to Encore’s terms and conditions).

An example of an artist- rather than venue-facing concierge service is Gigmit Gold, which bills itself as a “digital booking agency” that will give one-on-one help to artists looking to land performance slots at festivals and other events that are listed on the more open Gigmit site. Interestingly, their business model is based not on a commission, but rather on a subscription fee of €159/month (or a discounted €1548/year), with a guarantee of at least one gig per month.

While most of the startups in this database do not offer these kinds of hands-on concierge options, I think more of them will shift towards that model in the near future, as they realize that their initial business model alone is not sustainable (or, at least, has yet to prove itself to be sustainable and profitable).

In other words, the agent and promoter are both here to stay.