Royal builds out entourage with $55 million investment from a16z

Royal builds out entourage with $55 million investment from a16z, The Chainsmokers, and Nas

Vinyl, CD, Spotify—whatever your preferred music-listening vehicle may be, it’s unlikely that you’ve ever actually owned a song. What you are instead buying is delivery of your favorite jams—not the music itself. Those rights to riches are more often than not reserved for the musicians (obviously), as well as the studios, agents, and others who operate behind the scenes.

A new music marketplace venture dubbed Royal wants to bring in the masses, though.

Led by Opendoor cofounder JD Ross, and Justin Blau, an electronic music producer and DJ who goes by the name 3LAU, the company hopes to bridge the gap between musicians and fans by using what it calls limited digital assets. Non-fungible token-like in nature, LDAs allow musicians to open up parts of a song’s ownership directly to the public—just as artists have been able to directly sell their art work online to the public in a verifiable fashion through NFTs. Royal will collect a fee on primary sales on its platform at a fixed rate of under 10%, in the process. “Royal seeks to unlock all the emotional value that music creates that isn’t being monetized today by democratizing access to music as an asset class, previously which only record labels and PE firms have been able to access,” Blau tells Fortune.

And to do that, Royal is adding more investors. 

The music marketplace has raised $55 million in a newly announced Series A that was led by Andreessen Horowitz and comes just a few months after its $16 million seed round. Other investors who participated in the latest funding were Coinbase Ventures, Founders Fund, Creative Artists Agency, and even musicians like Nas and The Chainsmokers. The company did not disclose what the valuation was from the raise.

“We believe blockchain technology has the ability to transform music ownership the same way the internet has transformed the way music is listened to,” The Chainsmokers said in a statement. “At the dawn of Web3, Royal’s model of modernizing the way we collect and share music made perfect sense to us as musicians and investors—we had to get involved.” 

The latest fund raising comes as the digital collectibles market has exploded in interest.

Following the art world’s full-throttle push to go digital, the National Football League has announced it will use NFTs to create commemorative tickets; a tungsten industrial company recently sold an NFT for $247,000 that allows the holders the right to make an annual visit to a tungsten cube weighing about 2,000 pounds in suburban Chicago; and some in the crypto world have even floated using NFTs to keep track of medical records.

But music may represent the next frontier, says Katie Haun, a general partner at a16z who co-chairs the firm’s crypto funds.

“Many know the feeling of discovering a new artist or band, only to see the fan experience degrade as they grow in popularity,” Haun wrote in a blog post on Monday. “Merchandise is more expensive, tickets get costlier and harder to come by. Artists also have no way of knowing which fans were in the early group that propelled their career forward, which they might well want to know not only from a brand perspective—understanding who the true believers are—but also to reward them with early access to shows, merchandise, or VIP pricing. NFTs have the potential to change all of this.”

Haun’s far from alone in her thinking, of course. Kings of LeonMike Shinoda of Linkin Park, and Grimes have all dabbled in NFTs this year. Blau has, too, as last month he gave away 333 limited digital assets that represented 50% streaming ownership of his latest single “Worst Case”. The song has already reached an implied value of more than $6 million, while more than $600,000 worth of volume has traded in the tokens on the secondary markets. Which, Blau says, “is insane.”

BRAINSTORM TECH: Next week, a16z’s Haun and Royal’s Blau will be joining Fortune’s Brian O’Keefe on stage in Half Moon Bay, Calif., at Brainstorm Tech 2021 to talk all things NFTs, Web 3.0, music, and more. Other speakers will include Waymo co-CEO Tekedra Mawakana, Levi Strauss CEO Chip Bergh, and Verizon chairman and CEO Hans Vestberg. To request an invite, register here.

A NOTE: With Lucinda enjoying a well-earned break, a few writers have been steering Term Sheet in her absence. The deals section of the newsletter will be pared down from its normal length, as a result. I’ll be back with you tomorrow, so please see below for my email. Tips and news are more than welcome, as is just stopping by to say hello. Rey Mashayekhi will be caping things off Wednesday before the long weekend, so please send deals for Nov. 24 to

Declan Harty

Published By : Fortune

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