Music/Tech Investment Dashboard

Music startup funding rounds: IRL experiences get new cash infusion

We’ve added 2 new rounds since our last dashboard digest, including live-events discovery platform Fever Up($227M) and blockchain based crowdfunding platform Corite ($6.2M).

Founded in 2014, Fever Up is probably the highest-valued events discovery platform you’ve never heard of. Though you may not be familiar with the name, chances are you’ve probably heard of one of their events. They are the company behind a number of well-publicized traveling location-based theme events like Van Gogh: The Immersive Experience (now in over 20 cities), Money Heist: The Experience, Stranger Things: The Experience … or basically, any popular media that you can add “The Experience” to.

Their funding round, led by Goldman Sach’s Growth Equitydivision, is claimed to be “the largest ever for a live-entertainment tech startup,” and puts the valuation of the company at over $1B — and on the path to a potential IPO. Other investors include Alignment Growth, Goodwater Capital, and Smash Ventures.

• In a world where most of the events-related discussion and capital in tech has centered around digital entertainment (per the $1.2B+ in investments we tracked in livestreaming and virtual event companies in last year’s database), the investment in Fever Up is placing a perhaps unusual bet on the return to and demand for live events. Though their music-specific event offerings are currently somewhat slim — there are a lot of “themed” events on their platform — it will be interesting to see if the company will use the new funding to expand their impact as a promoter, and perhaps take on live music behemoths like Live Nation or AEG.

The Sweden-based fan-funding platform Corite has raised $6.2M in a private token sale ($CO) for their blockchain-based project Corite CO, which will allow fans to directly support artists via blockchain funding, royalty sharing and NFTs. The round was led by blockchain company ChromaWay with involvement from Kyros Ventures, Kucoin and more.

• Corite launched in 2019, and their blockchain project Corite CO launched in fall of 2021 with Emery Kelly’s “Emotions” NFT drop, which raised funds to power upcoming music production and gave holders a small percentage of the song’s future royalties (similar to the model behind Royal). The company also has engaged in a number of partnerships to bolster its global impact, including with LA-based Hitco Entertainment in a play to increase the startup’s US presence. It will be interesting to see how they utilize the new funding: Will they cast their artist-net for bigger fish (like Royal, Unblocked, and others), or build up a steady roster of lesser-known artists (like Catalog or Sound)?

Adjacent rounds to know: Slow, steady emergence of crypto services companies

NFT startup Unblocked, which was behind the most recent Cypress Hill NFT drop, has raised a $10M round at a $90M valuation — which, for a seed round, definitely stands out as a high price tag (even for crypto). The round was led by Tiger Global, with involvement from Dapper Labs, Jay-Z’s Marcy Venture Partners, Shawn Mendes and Oaktree Capital.

• Unblocked isn’t an NFT platform per se; rather, it’s a “consultancy” that intends to build bespoke NFT platforms for big brands or big celebrities. Outside of Cypress Hill, they also made NFTs for Billboard (whose parent company, Penske Media, is also an investor in the startup). On an Unblocked site, a brand will be able to create and distribute NFTs on the Flow blockchain, as well as set up a secondary marketplace and curate community spaces where holders can congregate.
• Back in Q2 2021, we predicted that there would be rising demand for third-party services companies that would help give more structure to music companies’ emergent crypto strategies, such as NFT agencies (e.g. six), NFT artist management firms (e.g. AG Artists’ Permanent Arts) and NFT media companies (e.g. NFT Now). Six months later, this services landscape still seems relatively sparse, to the point where a company like Unblocked can still make a meaningful dent with the right combination of partnerships and execution.

Artists on cap tables: More music celebs invest in NFT platforms — even without releasing NFTs themselves

We’ve added 3 artists across 2 cap tables to our database this week, including Nas, Shawn Mendes and Jay-Z.

Nas has invested in Carry1st, a mobile game out of Cape Town, South Africa. Other investors include Google, Riot Games and Andreessen Horowitz. Nas (who recently launched his first NFT with Royal, covered below), is an active investor in tech, whose portfolio includes blockchain/sports NFT platform SportsIcon, sports-betting company Underdog Fantasy, influencer marketing platform Breakr, creator-economy prediction platform VersusGame and blockchain music streaming platform Audius.

Both Shawn Mendes and Jay-Z’s Marcy Venture Partners have joined the cap table for Unblocked (covered above). Jay-Z’s other recent investments cover a wide variety of companies, from health/fitness to food/beverage, fintech and the blockchain.

• Shawn Mendes is a notable investor in companies like livestreaming/virtual events platform Bright and boxed water company Flow. He has also become more increasingly involved in blockchain/crypto investments through his manager Andrew Gertler, a blockchain enthusiast, through which he was introduced to platforms like avatar company Genies and Sturdy Exchange.
• Despite being active crypto investors, both Shawn Mendes and Jay-Z have stayed relatively quiet when it comes to launching their own artist-branded NFTs. Mendes launched his own drop in partnership with Genies during the early wave of music NFTs last February, raising over $381K to fund a grant program for aspiring digital artists. Jay-Z has released only one NFT for auction so far, selling for $138K in partnership with Sotheby’s. Perhaps these artists are keeping their brands out of the NFT spotlight for now until the technology becomes more widely accepted by their fanbases, and are opting to stay on the pulse in a more passive way through their own personal investments.

Music/Web3 Dashboard

Music NFT platforms/startups: Memorabilia-driven collectibles for legacy artists

We’ve added three new NFT Platform/Start-ups to our database this week, including MusicArt, Pop Legendz, andNFT Tone.

Popping up more and more frequently in NFT platforms is the focus on “memorabilia” NFTs, which see platforms repurposing already-created content from artists into new income for estates and legacy artists on the blockchain (like the upcoming Beatles drop covered below). This week, two companies launched with this approach: Pop Legendz will be the platform behind the upcoming Nirvana NFT drop, and aims to corner to “tradition pop culture memorabilia market,” while MusicArt will focus exclusively on “celebrating music-based art and imagery,” hoping to corner the music artwork market.

As NFT platforms continue to launch (reminder: we are now tracking 83 such platforms in our dashboard), it will be interesting to see how they carve their niche in an already-crowded marketplace, and the different formats they hope to service — whether through royalty-sharing perks, collectible memorabilia, generative art or metaverse tie-ins.

Music NFT drops: High-profile drops ridden with scams and technical difficulties

We’ve added a number of new NFT sales to our database, including 9 from Sound (including Pussy Riot, Poolside, and Jacques Greene) and one-offs from Ozzy Ozbourne and Nas. We’re tracking upcoming releases from Nirvana, John Lennon/The Beatles, The Wombats and Steve Aoki.

Two highly-anticipated drops faced some technical difficulties this month: Nas’s partnership with Royal and Ozzy Osbourne’s CryptoBatz.

• Nas’s drop with Royal.io was the first live drop on the platform, after 3LAU’s previous drop was gifted rather than a sale. The drop was originally scheduled for January 11th but due to technical difficulties had to be pushed back to Jan 20. The result? Even more hype and build up, and the drop sold out in record time, selling a combined 1870 NFTs across 2 projects, and generating over $500K in funds raised, with royalty splits ranging from .0113-2.14% depending on token level. This is Nas’s first drop, following a number of peers who have dipped their toes into the space in the recent months (including Snoop Dogg, Ice Cube,and Ghostface Killah).
• Ozzy Osbourne’s CryptoBatz had a successful sellout — minting 9,666 NFTs with an estimated over $2M in sales — but was also plagued by scammers who created a bad link that the project’s official Twitter and website shared. Potentially 1,330 buyers were subjected to the scam, ranging in losses of hundreds to thousands for those who connected their wallets through the rogue link. Sutter Systems, who developed the CryptoBatz NFT, placed the blame on Discord, saying “we cannot take responsibility for the actions of scammers exploiting Discord.” Scams are nothing new to Discord crypto/NFT communities, and it’s likely that those who venture out into NFTs will remain at risk to scammers until more is done to address security in Web3 at large, even though so much of Web3’s philosophical ethos seems to be about putting the onus of responsibility on the individual user.

John Lennon/The Beatles new NFT collection “Lennon Connection: The NFT Collection” (which has a nice ring to it, if we’re being honest), is a joint venture between YellowHeart and legendary memorabilia auction house Julien’s Auctions. Auction items include items like “Hey Jude Notes Written by Paul McCartney,” “Black Cape worn by John Lennon” and “Gibson Les Paul Guitar,” with one caveat — it’s only an NFT of the memorabilia, and not the actual item itself. However, the teams are allegedly adding value to the NFTs by “bringing them to life” with audio narration by Julian Lennon, which is also minted as part of the NFT. Bids are already flowing in; the current highest bid is $30k for the “Hey Jude” notes NFT, with over a week to go.

Compared to the last Beatles NFT drop attempt (which only sold 1 edition at the minimum bid of 1.25ETH), this project seems much more well-received, potentially showing a path forward for more successful legacy & memorabilia related projects.