Stockholm-based music investment marketplace MasterExchange has raised a $2.7M (€2.46M) initial funding round, the firm announced today. Global investors like Hong Kong-based venture capitalist Vectr Fintech and Pan Capital CEO Claes-Henrik Julander participated in the startup’s funding round.
The fresh capital enables MasterExchange to launch its music investment platform, which allows anyone to invest in their favourite songs.
Stock exchange for music
MasterExchange was co-founded in Stockholm in 2022 by, amongst others, AI and blockchain expert Alexander Fred-Ojala, Star Stable founder Johan Edfeldt, and producer Jakke Erixson.
MasterExchange has a system called the Initial Music Offering (IMO). Like an Initial Public Offering (IPO), an IMO lets investors know that a song is available for investment. Any master royalty beneficiary, such as artists and music labels, can launch an IMO on the MasterExchange platform.
Investors who buy shares of song royalties receive the income generated from the song uses, such as streaming or a commercial feature. MasterExchange provides transparent information about investment opportunities for every song, allowing users to make well-informed decisions.
According to MasterExchange, it puts extra care into ensuring a secure environment for stakeholders. All parties must undergo safety checks to ensure they are eligible to participate in the MasterExchange ecosystem.
Users make payments in Euros via regular debit or credit cards. MasterExchange says it is working with a regulated payment service provider and a custody partner to keep customer funds safe.
Alexander Fred-Ojala, co-founder and CEO of MasterExchange, says, “This innovation allows music lovers to find unique and exciting new ways to connect with the music they love, whilst allowing the industry new, easy-to-use channels to create super-fans.”
“For the creators, MasterExchange offers the opportunity to sell a part of future revenues, giving them more possibilities to fuel artistic creation. MasterExchange is well-positioned to drive this change with a team that has frontier tech expertise, deep roots in the music industry, and company-building experience,” he further explains.
The investors are “not your everyday angels”
MasterExchange co-founder and chairman of the board, Johan Edfeldt, says the team was happy to have the participating investors onboard for the project. Edfeldt described the investors as “not your everyday angels” because of their deep industry knowledge.
“This group brings profound knowledge of B2C plays (Rob, founder of Miniclip), sophisticated investment tools (Claes-Henrik, founder of Pan Capital) as well as the B2B2C VC perspective from Vectr Fintech (a San Francisco/Hong Kong based investment fund). We are proud and happy to have them onboard,” he adds.
Jason Best, Managing Partner at Vectr Fintech, says, “We invested in MasterExchange because their experienced and execution-focused team has delivered the easiest user experience for artists, fans and music industry professionals.”
Best also talked about how the platform’s fiat currency-based model makes it easier for fans to invest in artists’ music. We believe that MasterExchange is capable of unlocking billions of euros of music investment value,” he adds.
For now, the platform is available to customers in the EU, UK, and EEA countries. MasterExchange has introduced the first song that people can invest in, which is Sofia by Spanish-German singer Alvaro Soler. Investors have until August 15, 2023, to invest in the piece, with the platform planning to introduce more songs soon.