On-chain music platform Royal has announced a Series A funding round led by venture capital giant Andreessen Horowitz.
Royal allows fans to buy music rights via nonfungible tokens (NFT). Its co-founders, entrepreneur JD Ross and DJ Justin Blau who goes by the stage name 3LAU, announced on Tuesday they had closed a $55-million Series A funding following a $16-million seed round in August.
Prominent venture capital firm Andreessen Horowitz, or a16z, led the round. Kathryn Haun, general partner at a16z, tweeted about the firm’s investment in Royal’s possibility of transforming the music industry.
Additional investment came from CAA and NEA’s Connect Ventures, Crush Music, Coinbase Ventures, Founders Fund and Paradigm. Celebrities and global artists such as The Chainsmokers, Nas, Logic, Kygo, Stefflon Don, Joyner Lucas and Disclosure backed the project as well. Royal will use the funds to scale its team and invest in the growth of artists who sign up for the platform.
CEO Justin “3LAU” Blau shared Royal’s main goal with Cointelegraph:
“Allow fans to co-own music with their favorite artists by leveraging blockchain technology to grant music rights, and aligning incentives between fans and artists. We’re starting off with a curated group of artists for our initial sales, but we plan on opening up the platform to more artists in the future.”
Last month, Blau gave away 50% of the streaming rights to his song “Worst Case” to 333 fans. Those fans get a cut of the royalties via NFTs whenever the song is streamed on Spotify, Apple Music or another streaming service. The song reached an implied value of over $6 million with fans holding half of the value, and the tokens traded more than $600,000 in secondary market volume in only the first two weeks, according to Blau.
When asked how NFTs can solve the current issues within the music industry, Blau said:
“Artists’ livelihood is based on how much their fans support their music, but listeners aren’t compensated at all for that interaction. Royal leverages the NFT standards to help artists get more independence and help them capture more of the emotional value that music inherently creates.”
Royal wants to challenge the value of music ownership, which, according to Blau, is “vastly misrepresented and undervalued today.” Historically, ownership of music royalties, including streaming, has been exclusively available to labels, hedge funds and private equity firms as a portfolio asset, he explained.
This could all change, however, as more and more musicians embrace the Web 3.0 ecosystem and simultaneously empower their fanbase while funding their careers. Royal’s upcoming sale will go live within the coming weeks.