Swedish company Snafu Records has been attracting industry attention for launch in February 2020 with $2.9 million in seed funding.
In 2021, Snafu, a record label and A&R tool that uses artificial intelligence to discover new music, completed a $6 million funding round led by Pophouse Ventures, with participation from TheVentureCollective, ABBA member Agnetha Fältskog, and Savanna Kotecha.
Now, Snafu is announcing what it says will be a new $7 million “equity and credit” funding round.
The new funding round was led by Pophouse Entertainment and also brought in music executive Marc Jordan through his investment fund Blue Amber Investments, multi-platinum LP artist, Supercell co-founder Mikko Kodisoja and Danish company venture capital firm Blackwood Ventures.
Swedish company Snafu uses an AI A&R tool dubbed “EMMA” which it claims was trained to “find undervalued artists based on a wide range of metrics.”
Snafu says its proprietary algorithms analyze millions of data points from more than 150,000 songs per week, “identifying artists whose music is undervalued and needs boosting.”
“We then design deals that make sense for the project, deals where the artists still feel independent,” the company explains on its website.
According to Snafu, “EMMA” has identified “many rising stars” for the Snafu Records label, such as the hit song TikTok maybe my soulmate is dead by iamnotshane, which has amassed over 75 million streams across all platforms since its release last year.
Snafu says he has signed about 75 artists in total, including Hit-Boy, iamnotshane, Bayli and RANI.
More recently, Snafu Records began using its artificial intelligence algorithm to identify catalogs of independent artists that it believes “could reach a wider audience”.
Snafu then invests in those artists through initial cash advances and what he calls “catalogue growth strategies” through his new Snafu song fund.
Snafu says these advance deals see the songs licensed to the label for an agreed period and that he is not acquiring artist rights through the fund.
If, for example, Snafu’s AI identifies a song by an independent artist and projects that the song would generate a certain level of revenue over a two-year period, the label would offer the artist an advance and a short-term contract. term of approximately two years. Snafu says that once the contract is over and the artist has recovered, the artist retains “full ownership of their material.”
(However, independently of the Snafu Song Fund, the company claims that if an artist signs a full label deal with Snafu, they share master rights 50/50.)
Mira Howard, who runs Snafu’s Song Fund, says that “in just a few months, Snafu has “paid almost $2 million advances to independent artists” via the Snafu Song Fund. Snafu says he has worked with over 30 artists through the fund so far.
“Rather than focusing on generative AI, our intention has always been to create algorithms that shine a light on undervalued talent around the world.”
Ankit Desai, Snafu Record
Ankit Desai, CEO and Founder of Snafu Records, said, “When we founded Snafu, we already recognized that AI was poised to be a catalyst for change in the music world.
“As creators at heart, we wanted to leverage this technology to elevate the many talented artists around the world. Rather than focusing on generative AI, our intention has always been to create algorithms that highlight spotlight undervalued talent across the globe.”
Desai added, “There is already a slew of incredible man-made music coming out every day that doesn’t get the chance to be heard. We got into this business because we were touched by the unifying power of music.
“We see that our goal is to use technology to bring people together with other people, not with another algorithm.”
Mira Howard, who runs Snafu’s Song Fund, added: “The response has been tremendous. In a few months, we have made nearly $2 million in advances to independent artists.
“Plus, many of them, including Edo, Jo and Matt Duncan, have more than doubled their monthly viewership since joining Snafu’s Song Fund. We are excited about what awaits us. »
“What Snafu is doing with Snafu’s Song Fund, using AI to identify artists for financial support, can enable more artists to make a living from their art.”
Marc Jordan, manager and investor at Snafu Records, said, “One of the biggest challenges independent artists face is financial.
“It costs money to tour, to finish an album or even to earn a living as a creative. What Snafu is doing with Snafu’s Song Fund, using AI to identify artists for financial support, can enable more artists to make a living from their art.
“This is where the future of the music industry is headed.”
Elsewhere in the field of music financing, the financing of the startup Duetti, which acquires music rights for independent artists, recently closed its $32 million funding round from investors such as Viola Ventures and Viola Credit, Roc Nation, Untitled and Presight Capital.
The startup, founded by former TIDE Director of Operations Lior Tibon and a former Apple Music Business Development Manager Christopher Nolte says it has “become an essential business tool” for more than 60 independent artists, including CVBZ, Sylvan LaCue and Croosh, and has partnered “with deals on over of 100 titles”.
Nowadays, Duetti claims it has facilitated music rights acquisitions that have seen artists receive up to $400,000 per contract.
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