beatBread has big plans to accelerate its growth in the artist funding space, and it’s just closed a $100 million institutional fund with asset manager Variant Investments to do so.
Launched in November 2020, the company has made over 500 advances to artists and labels, ranging from $1,000 to as much as $2 million per artist for a limited share of revenues on catalog, and, if the artist chooses, on new unreleased music. These advances are repaid from a share of an artist’s streaming and airplay revenues, over a period of the artist’s choosing.
beatBread’s rapid rise in the artist financing space coincides with the growth of the independent artist sector. This newly-closed $100 million fund, says beatBread, will allow it to offer advances not only to emerging independent acts, but also “to some of the world’s biggest artists”.
The company’s proprietary chordCashAI engine evaluates artists’ streaming and social and other data to generate advance offers. The startup has struck over 20 white-label deals with distribution companies, including UnitedMasters and Symphonic Distribution, to use its ‘chordCashAI’ tech to offer advances to their own artists.
beatBread co-founder and CEO Peter Sinclair tells MBW that the idea for the platform came about after he left a prior start-up to join Universal Music Group due to a health issue with one of his children.
In 2015, Sinclair joined Universal to oversee the major’s “superfan business” as SVP Consumer & eCommerce. There, he saw that “many artists didn’t need all the services that were part of the label deal – they had their own teams set up to do that already”.
“Artists were still paying for [those services], because that was what the agreement said– the artists just had another way they wanted to go,” he adds.
“This added a ton of unnecessary cost and friction. It wasn’t that major label marketing, merch or promotional services were bad, and in fact, the teams were often great. It’s just that each artist had their own teams, designed to fit their own circumstances. No major team could ever possibly offer the best fit services to each artist on the roster every time.”
He continues: “There had to be a better way. As an outsider with fresh eyes, it was very clear to me that force-feeding service with finance was just a bad idea. Artists would be better served if finance and services decisions were separated, so that artists could choose the services that were the best fit for them.”
Enter beatBread, described by Sinclair as a financing platform that’s “unbundled from distribution, promotion, or any other services”.
“We believe that artists should be able to access capital without giving away the farm,” he argues. “Our algorithms are able to very accurately calculate what kind of advance an artist can reasonably receive from their streaming revenues, based on terms that they decide.
“Everything else – live music, merchandise, publishing, sync, endorsements etc – belongs to the artist.”
beatBread’s co-founders include John Haller, who leads the startup’s data science and artificial intelligence strategy. An engineer by training, Haller’s career includes building predictive models in areas as diverse as retail electronics, auto insurance and energy trading.
On the industry engagement front, beatBread has been making a fair amount of noise this year. In March, the company launched an Artists Advocacy Council featuring the likes of Mike Caren (Artist Partner Group), Ray Daniels, former A&R at Atlantic and Interscope, and Dave Dederer (label owner and founding member of The Presidents of the United States of America) as founding members.
Just last month, beatBread also launched what it calls an “exclusive investor network” that adds funding from music companies and professionals, distributors and “high net worth individuals” to its existing pool of institutional capital to enable artists to get what it says are even better terms when qualitative factors, like high profile future touring dates, star collaborators or a particularly successful marketing or production partner are joining the next release.
The network allows music professionals, distributors to invest in fractions of a deal without having to fully fund each artist project on their own. Investments through the network can be as small as $1,000 “or as much as several million” with a focus on artists “in the early and mid stages of their career”.
Having bulked up its available pot of institutional capital, Sinclair is bullish about beatBread’s long-term prospects in the independent artist funding space.
“Our initial artist fund powered more than 500 advances to artists and independent labels,” he says. “Now we can fund the next 1,000 deals, and be truly competitive for deals with the vast majority of artists in the world.”
SOURCE: MURRAY STASSEN