Aussie-founded music marketplace platform Songtradr has raised US$30 million ($41.7 million) in Series C funding, as COVID-19 shakes up the music industry and paves the way for growth in B2B licensing.
Led by the Australia-based St. Baker family office, the round also included a group of additional family offices, as well as investment from previous backers.
It lands the startup with a hefty valuation of $229 million.
Founded in 2014 by Aussie Paul Wiltshire, the LA-based startup is a marketplace connecting artists, composers, labels and publishers — anyone who owns or controls music rights — with anyone who uses music in their content.
That could be streaming platforms, brands, advertisers, TV companies and filmmakers, and even YouTubers and social media influencers.
Artists can also use the platform to deliver music to services such as Spotify, and to collect royalty income for their work.
“Data is at the core of what we do, to inform the marketplace and to get a match for music to a particular music buyer,” Wiltshire tells SmartCompany.
The Series C round follows a US$12 million Series B, closed in February last year.
That funding was largely directed towards a strategic acquisition that “has been very fruitful and has helped us drive global growth”, the founder says.
The business has grown 160% year-on-year, comparing the first half of 2019 to the first half of 2020.
Now, as well as working on product development and investing in global expansion, Wiltshire is continuing to focus on an acquisition strategy.
He points to the success of Spotify as a leader in the business-to-consumer music marketplace sector.
“We’re trying to build the B2B version of that, which is quite different in nature,” he says.
“But it does require substantial investment into new products.”
While some of those new products can be built in-house, often it’s faster and more beneficial to acquire a business has already created them, rather than starting from scratch.
Aussie at heart
Although the business is based in LA, where Wiltshire has lived since 2014, this round was notably led by Aussie investors.
“We consider ourselves a global business,” the founder says.
Songtradr has offices in the UK, Paris, Hamburg and Sydney, and is focusing on Australia as a destination for building out its technology offering.
“Possibly I naturally think a bit more globally, having grown up in Australia and spent time in both America and Australia,” he says.
“It’s been great to build our cap table with fellow Australians.”
For Wiltshire, it’s important, in a way, to keep the business connected to his Aussie roots.
“We like calling it Australian-owned”, he says.
And, while COVID-19 may have led to funding headaches for some startups, the rise of the remote meeting makes it easier to close these long-distance deals.
For Wiltshire, this was a positive fundraising experience.
“All of the investment meetings were done over Zoom or Hangouts. None involved me wearing shoes,” he says.
“There’s been an adjustment of culture,” he adds.
“People have got much more used to this type of communication … It’s become quite a connected way of communicating.”
And, while we haven’t necessarily seen the end of business drinks and lunch meetings and travelling for face-to-face meetings, people are reflecting on those practices and realising they weren’t always strictly necessary.
“I do think there is going to be irreversible change,” he says.
“We’re going to get so used to this that we will just rethink the way we budget for things,” he adds.
“We have to question the past.”
A COVID-19 cultural revolution?
As well as recording revenue growth over the past six months or so, COVID-19 has led to an increase in music uploaded to Songtradr.
With artists unable to perform live shows, they’ve been “stripped of a very valuable income stream”, Wiltshire says.
“Many of them have looked to how they can generate digital income as an alternative.”
So far this year, 250,000 tracks have been uploaded, bringing the total number of songs available to 1.3 million, he explains.
There has also been a three-fold increase in the amount of new music put onto Spotify and Apple streaming services through Songtradr, since the onset of the pandemic.
“Monthly earnings paid to our artists has doubled over the past six months.”
With artists stuck at home, confined to their studios and creating new tracks, this is potentially an exciting time for new music. But, it’s also challenging for those who have lost income streams.
“It’s inevitably both,” Wiltshire says.
“For those music creators who earn a living from live performance it’s a really tough time,” he says.
But, the numbers do suggest musicians are getting creative in their downtime.
“We’re definitely seeing much more music uploaded than we have ever before.”
Wiltshire himself comes from a songwriting and music production background. Speaking as a creative, he notes that we’re in a period of significant, sweeping cultural change.
Between the isolation, the high emotions and the first-time experiences COVID-19 has brought about, “this time is fertile ground for creativity and creating new music, and using that as an inspirational tool”, he says.
“I think we’ll see some really interesting trends and shifts and new sounds, potentially, over the next six to 12 months,” he muses.
“There’s so much cultural change and cultural challenges … it’s probably a little reminiscent of the early-70s.”