Good morning. Fortune finance reporter Declan Harty here, filling in for Lucinda to start off Thanksgiving week.
Music ownership is a bit byzantine for fans.
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 Leon, Mike 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 firstname.lastname@example.org.
- Deliverr, a San Francisco fulfillment company specializing in e-commerce, raised $250 million in Series E funding. Tiger Global led the round, which included additional investments from 8VC, Activant, GLP, Brookfield Technology Partners, and Coatue.
–Resilience, the San Francisco-based cyber insurance company, raised $80 million in Series C funding. General Catalyst and cybersecurity company Rapid7’s CEO Corey Thomas led the round. Lightspeed Venture Partners, Founders Fund, Charles River Ventures, Shield Capital, and Intact Ventures invested as well.
- Fuzzy, the digital pet care company based in San Francisco, has raised $44 million in a round led by Icon Ventures. Other investors who participated were Greycroft, Matrix, and Crosscut.
- Pace, a Singapore-based buy-now pay later company, has raised $40 million in Series A funding. UOB Venture Management, Marubeni Ventures, Atinum Partners, AppWorks, and several family offices from Japan and Indonesia joined already existing investors in participating in the round.
- Jina AI, a neural-search startup based out of Berlin, has raised $30 million in a Series A that was led by Canaan Partners. Other investments in the round came from Mango Capital, as well as existing investors GGV Capital, SAP.iO, and Yunqi Partners.
- Fonoa, a Dublin, Ireland-based startup focused on tax automation for online businesses, has raised $20.5 million in a Series A round that was led by OMERS Ventures, and included participation from Index Ventures, FJ Labs, and Moving Capital.
- Render, the San Francisco-based cloud company, has closed a $20 million Series A round that was led by Addition and included investments from General Catalyst and South Park Commons.
- Helaina, a New York company developing a new kind of infant milk, has raised $20 million of Series A investment. The round was co-led by Spark Capital and Siam Capital, and included participation from Plum Alley Investments and Primary Venture Partners.
- Vesttoo, an Israeli company that operates a financial risk-management platform, raised $15 million in a Series B funding round that was led by Mouro Capital and included participation from MS&AD Ventures.
- Z1, a neobank based in Brazil, has raised $10 million in Series A funding from Maya Capital, Homebrew, Clocktower, and The Chainsmokers. Kaszek Ventures led the round.
- HPS Investment Partners and CVC Capital Partners are buying equity stakes in Authentic Brands Group that values the owner of Forever 21, Brooks Brothers, and Sports Illustrated at $12.7 billion. The investment comes as Authentic Brands presses pause on its plans to go public, with CEO Jamie Salter telling CNBC that it's now looking to IPO in 2023 or 2024.
- KKR has submitted a proposal to acquire Telecom Italia, the largest phone company in Italy, for €10.8 billion ($12 billion).
- CVC Capital Partners has agreed to acquire Ekaterra, Unilever's tea business, for €4.5 billion ($5.1 billion).
- Warburg Pincus is weighing buying a minority stake in China Everbright Bank's wealth management business, per Bloomberg. Discussions being held between the bank and potential investors that include the private equity company are ongoing and may reportedly value the stake between $300 million to $400 million.
- Comvest Partners made a strategic investment in Renovation Brands, an e-commerce company specializing in home-improvement products. Financial terms weren't disclosed.
- MGC Diagnostics, a portfolio company of Altus Capital Partners, has agreed to acquire Lemon Medical, a Hammelburg, Germany-based medical technology company. Financial terms weren't disclosed.
- Bain Capital and Hellman & Friedman have inked a $17 billion definitive agreement to acquire healthcare-technology company Athenahealth from Veritas Capital and Evergreen Coast Capital.
- Concentrix Corporation is buying customer experience design engineering company PK with a $1.6 billion investment. Carlyle is selling its funds' majority stake in the company.
- Oak Hill Capital has agreed to acquire U.S. Oral Surgery Management, a healthcare management services company, from RiverGlade Capital. Financial terms weren't disclosed.
- Sandvik agreed to acquire GWS Tool Group, a cutting tools manufacturer, from L Squared Capital Partners. Financial terms weren't disclosed.
- Ericsson, a Swedish telecommunications company, has agreed to acquire Vonage Holdings for $21 per share, an all-cash deal that carries a total price of $6.2 billion.
- FAT Brands, the restaurant company that owns 15 brands including Johnny Rockets and Fatburger, is buying Native Grill & Wings for $20 million.
– Monster Beverage, the Coca-Cola-backed energy drink maker, is considering a deal with Constellation Brands, per Bloomberg.
- Mondelez International, the Chicago food giant, is considering a bid for South Africa's AVI, a food and beverage company, per Bloomberg.
- Schwarz Group, the German company behind grocery store Lidl, is acquiring cyber risk and cloud security company XM Cyber.
- Saudi Tadawul Group, Saudi Arabia’s stock exchange operator, plans to raise up to $1 billion in an IPO, per Bloomberg.
- SenseTime Group, a Chinese artificial intelligence company, received approval to go public in Hong Kong. An IPO could raise approximately $1 billion for the company, per Bloomberg. SoftBank backs the firm.
- ProFrac, a Willow Park, Tex.-based energy services provider for upstream oil and gas companies, filed for an IPO. The company posted $548 million in total revenue in 2020 and a net loss of $119 million.
- Vigil Neuroscience, a Cambridge, Mass.-based therapeutic development company for neurodegenerative diseases, filed for an IPO. The company reported a net loss and comprehensive loss of $29 million between June (its inception) and Dec. 2020. Vigil has yet to post revenue. Atlas Venture, Northpond Ventures, Vida Ventures, and Amgen back the firm.
- Samsara, a San Francisco-based operations cloud company, filed for an IPO. The company posted $250 million in revenue for the year ending in Jan. 2021 and reported a net loss of $210 million. Andreessen Horowitz and General Catalyst Partners back the firm.
- Abu Dhabi National Oil Company is weighing a 2022 IPO of ADNOC Logistics & Services, the company’s marine services, logistics and shipping arm, per Reuters.
- Sokolov, a Russian jewelry company, is weighing a 2023 IPO in Russian and the U.S., per Reuters.
- Yunhong International Co., a Wuhan, China-based SPAC, will dissolve after not reaching a deal before its deadline, per Bloomberg. The SPAC is led by Patrick Orlando, who also runs Digital World Acquisition Corp., the blank check company attempting to merge with Donald Trump’s startup media company.
- Bitdeer Technologies, a Singapore-based crypto mining company, plans to go public via a merger with Blue Safari Group Acquisition Corp., a SPAC. A deal values the company at approximately $4 billion.
- Eclipse Ventures raised $510 million for a fund focused on early-growth companies.
- Kompas has launched a new $160 million fund looking at the construction, real estate, and manufacturing industries, with a sustainability and technology innovation tilt.
- SoftBank Vision Fund has promoted investor partners Dennis Chang, Lydia Jett, Sumer Juneja, and Vikas Parekh to managing partners.
- MSD Partners named Carlos Soto as a managing director and head of business development for its private capital group. Soto was previously at Comvest Partners. The Michael Dell family office has also named Federico Schiffrin as a managing director in its strategic partners group. Shiffrin previously worked at Unigestion.
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