Music Royalty


Dec 12, 2020



Dec 12, 2020



The music royalties business has seen a resurgence of late, with two high profile transactions announced recently -- Bob Dylan sold the rights to his entire song catalogue (some 600 songs) to Universal Music Group for $300m, and Stevie Nicks of Fleetwood Mac fame sold an 80% interest in her catalogue (which is estimated to be valued at $100m) to Primary Wave. Let’s not forget Taylor Swift either, whose early recording catalogue was purchased by Shamrock Capital Advisors for over $300m.

The recent deals highlight the rising value of music in the streaming era (with multiples paid increasing significantly), and will be income generating assets for the new owners for many years to come. Some of Bob Dylan’s songs, for example, could produce income until 2106. The rise of platforms like Spotify “have brought about a more quantifiable and predictable model for the industry”, meaning investors with very little music industry experience are more confident in their ability to enter into the field as valuations are easier to determine.

While listeners get to consume the product instantly, artists, record labels and songwriters all have to wait months to receive any type of royalty payment as there is a supply chain bottleneck. It is estimated that $100b is trapped across the media ecosystem in accounts receivables. Fintech is playing a crucial role in solving low-cost streaming payments and lending solutions.

Streaming aside, or perhaps because of it, music has generally proven to be a stable, recession-proof asset where returns are much less correlated to the broader economy. Who would have ever thought that in today’s world, music royalties would have so much in common with Bitcoin? Take it from the queen herself (who somehow managed to release yet another album overnight), these really are extraordinary times.

Portfolio News

MassMutual joins the bitcoin club with $100m purchase - MassMutual purchased the bitcoin through portfolio company NYDIG, which has about $2.3b of bitcoin and other cryptocurrencies under management. MassMutual also acquired a $5m minority equity stake in NYDIG, which was formerly known as New York Digital Investment Group. Read more

Sigma releases API to detect and score financial crime risk at scale - As the year comes to a close, portfolio company Sigma Ratings has continued to work toward building pioneering technology that changes the way we work everyday. The company is proud to announce the release of the Sigma Risk API, developed by the combined effort of their team of dedicated engineers and expert analysts. In < 1 hour, clients can integrate Sigma’s API into their internal environment and integrate Sigma data directly into existing systems. Read more

Ocrolus virtual roundtable: New models for fraud prevention - Portfolio company Ocrolus is hosting a virtual roundtable on Wednesday, December 16 at 1pm EST. Discover the issues, technologies and advanced methodologies that lenders need to understand to combat fraud detection and improve margins in an increasingly competitive marketplace. Click on the link to register. Read more

Vestwell, Envestnet partner on 401k investment management - Portfolio company Vestwell announced a partnership with Envestnet to give advisors who use its platform access to Envestnet’s 3(38) investment management services. Envestnet will provide plan-level fiduciary services, while Vestwell manages recordkeeping and plan administration. Vestwell noted that “over time, the relationship will expand to include other Envestnet offerings.” Read more

Embroker launches Embroker Access - Digital commercial insurance broker Embroker launched a new online service (Embroker Access) that allows retail and wholesale brokers to offer Embroker’s digital insurance products. The company also announced that its instant management liability package, previously only offered to technology companies, is now available to all private businesses. Read more

Music Royalty

From Bob Dylan to Blondie — why investors are buying up hit songs - As artists starved of touring income because of coronavirus pandemic restrictions cash in on old classics, there are plenty of takers. According to music industry sources, the feeding frenzy for publishing rights has effectively doubled the value of such catalogues in the space of five years. Huge pools of money, which normally find a home in assets such as property or infrastructure, are backing companies such as Hipgnosis, Round Hill Music, Primary Wave and Concord. Read more

Centrifuge Tinlake and Paperchain join forces to accelerate music streaming revenues - While media consumption has shifted to streaming and on-demand models, the revenue and payments process hasn’t kept up. Despite the instant and seamless consumption of music, recording artists sometimes have to wait up to 6 months to receive streaming revenues. Understandably, the complexity of layers and intermediaries in this supply chain contributes to the delay in royalty payments reaching the artists. This is where Paperchain and Tinlake come in. Read more

Stevie Nicks sells stake in songwriting catalog - Music publisher Primary Wave purchased an 80% interest in the copyrights, which are valued at about $100m. The deal, which includes hits “Edge of Seventeen,” “Rhiannon” and “Landslide,” highlights the soaring value of music in the streaming era. Read more

Industry News

Zurich Insurance nears $4b deal for MetLife property and casualty (P&C) insurance unit - The deal, executed through its Farmers Group subsidiary, would expand Zurich Insurance’s P&C business, as the industry grapples with fallout from the COVID-19 pandemic, which drove up claims for business interruptions and event cancellations. It would also allow MetLife to exit a business in which it faces fierce competition from larger players such as State Farm, GEICO and Progressive Insurance. Read more

Spain’s second-largest bank will soon launch crypto services - BBVA, the second-largest bank in Spain, with about $840b in assets, is poised to enter the cryptocurrency trading and custody space, according to two people familiar with the plans. The Spanish bank will begin its crypto offering out of Switzerland. Read more

Revolut takes on digital payment rivals with new service for businesses - Revolut has launched a new service allowing businesses in 13 European countries to accept online card payments, expanding its product range and taking on established rivals in a high-growth area. The new product pits Revolut against fast-growing incumbent digital payment providers Stripe and Adyen. Read more

Betterment CEO Jon Stein steps down - Betterment founder Jon Stein is stepping down as chief executive and will be succeeded by Sarah Kirshbaum Levy, a former executive of ViacomCBS. The New York based firm that was founded in 2010 manages $25b with more than 550,000 customers. Read more

US to shift burden from banks in overhaul of money laundering laws - The US Congress is expected to approve the first overhaul of the country’s anti-money laundering laws in decades. Under the new legislation, all US corporations will have to register the identity of their beneficial owners in a database operated by FinCEN, in order to prevent criminals from using shell companies to conceal ill-gotten gains. Read more

Mastercard, Visa stop payments processing on Pornhub over alleged content - The two payments giants cite reports of the numerous videos posted on the site of sexual assault of minors as reason for the move. Mastercard said it would permanently end the use of its cards on the sex video site after the report came out and was confirmed, while Visa said it would be suspending the payments until an investigation was completed. Read more

Robinhood Is losing thousands of traders to a China-owned rival - Even in a year full of surprises on Wall Street, this one stands out: A Chinese-owned brokerage has quietly built one of the fastest-growing retail trading platforms in the U.S. Webull, founded by Alibaba alum Wang Anquan, has increased its roster of brokerage clients by about tenfold this year, to more than 2m, by offering free stock trades with a slick online interface. Read more

Facebook adds carts to WhatsApp to make shopping easier - Carts are aimed at making it easier for consumers to buy multiple items from a business, and for merchants to keep better track of order inquiries and manage requests. But one big element that remains missing from WhatsApp’s shopping experience is support for payments. Read more

JPMorgan CEO Jamie Dimon says he’s open to asset manager acquisitions - It’s not just asset managers that Dimon is interested in. He noted that the bank has some investments in the fintech space and that there may be some opportunities for an acquisition. Dimon’s eye for deal making makes sense as financial institutions look to diversify their revenue streams in a low interest rate environment. Read more

Online lender SoFi explores deal to go public - The San Francisco based company, which was valued at $4.8b in a private fundraising round last year, has held talks with a number of so-called special purpose acquisition companies (SPACs). The discussions show that going public is solidly in the sights of SoFi’s CEO, Anthony Noto. Read more

Goldman plots Florida base for Asset Management in a blow to New York - Florida’s warm weather and lack of a state income tax have lured wealthy Americans for years. But until 2020, the region struggled to peel away the rainmaking class from Wall Street’s most elite firms. Most hedge funds that relocated to the state were relatively small. Now the migration of larger financial firms and money managers is showing signs of gaining momentum. Read more

Outages at Interactive Brokers, Robinhood leave stock traders furious - A spike in individual investing this year has buoyed the entire brokerage industry. Retail equity orders accounted for 20% of U.S. stock trading in the past quarter, up more than five percentage points from the prior year. But as much as the boom in stock trading by individuals has been a hallmark of this year, so has service disruptions at the online brokerages. Read more

MicroStrategy to raise $400m to buy even more bitcoin - MicroStrategy bills itself as a business-intelligence firm but has been doubling down on its capital-allocation strategy disclosed in July, which includes investing up to $250m in assets including Bitcoin. Read more

Paysafe to go public in Bill Foley-backed $9b deal - London based payments processor owned by The Blackstone Group and CVC Capital Partners, agreed to be acquired via a $9b reverse merger with a SPAC led by Bill Foley. Foley said in an interview that Paysafe had been at the top of his target list of mergers because it had different businesses that could be scaled. Read more

China hands out $3m of digital yuan as JD.com becomes first online platform to accept it - A total of 20m yuan ($3m) will be up for grabs in a lottery. Winners will receive a so-called “red packet” via an app containing a maximum of 200 yuan of the digital currency. A hundred thousand of these red packets will be distributed. Those who receive the digital yuan can spend it on JD.com’s online shopping platform. Read more

Payments have become tech arms race say banks - The vast majority of banks (94%) believe that the Covid-19 pandemic has turned the payments market into a technology arms race for which they are unprepared. Read more

Select Financings

At-Bay - Mountain View based cybersecurity insurance startup raised $34m in Series C funding led by Qumra Capital. Read more

Bitso - Mexico City based crypto platform targeting Latin American markets raised $62m in Series B funding led by Kaszek Ventures and QED Investors. Read more

Centivo - New York based insurance platform to help self-funded employers offer health plans and manage employee medical expenses raised $34m in Series B funding led by B Capital Group. Read more

CHAI - South Korea based payments API startup raised $60m in Series B funding led by Hanhwa Investment & Securities. Read more

Cleo - London based financial digital assistant for Gen-Z raised $44m in Series B funding led by EQT Ventures. Read more

Fetch Rewards - Wisconsin based savings app raised $80m in Series C funding led by Iconiq. Read more

GoHenry - UK based pre-paid debit card startup focused on kids and teens raised $40m in new funding led by Edison Partners. Read more

HomeLister - Los Angeles based digital brokerage for homeowners to list and sell their properties online raised $4.5m in Seed funding led by MetaProp and Homebrew. Read more

Immedis - Dublin based payroll solution raised $50m in growth funding led by Lead Edge Capital. Read more

Luko - France based home insurance startup raised $60m in Series B funding led by EQT Ventures. Read more

Outfund - UK based provider of revenue-based financing for online businesses raised £37m in equity and debt Seed funding led by Fuel Ventures. Read more

Pico - New York based analytics platform for financial markets raised $135m in Series C funding led by Intel Capital. Read more

Squire - New York based barbershop management and point of sale system software platform raised $45m in Series C funding led by Iconiq Capital. Read more

Sundae - San Francisco based real estate marketplace raised $36m in Series B funding led by QED Investors. Read more

Synctera - San Francisco based startup developing a tool to connect credit unions and community banks with fintech companies raised $12.4m in Seed funding led by Lightspeed Venture Partners. Read more

Tink - Stockholm based open banking platform raised €85m in new funding led by Eurazeo Growth and Dawn Capital. Read more

Unit - San Francisco based startup helping banks and fintech companies build out their tech raised $18.6m in funding from investors including Better Tomorrow Ventures, Aleph, Flourish Ventures, TLV Partners and Operator Partners. Read more


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