Stem Raises $8 Million to Help Artists Collect Digital Revenue
The startup has helped musicians from Frank Ocean to Childish Gambino.
Stem, a startup that helps musicians from Frank Ocean to Childish Gambino collect digital revenue, says it has raised $8 million in a series-A funding round.
Co-led by venture capital firm Aspect Ventures and Evolution Media — a partnership between talent agency CAA, private-equity’s TPG and Participant Media — the investment round brings Stem’s total funding to $12.5 million, which will help it staff up and scale its platform, which is still in private beta mode.
Strategic investors in the two-year-old Los Angeles company that helps artists and labels manage contracts, distribution, payments and data include Upfront Ventures, WndrCo, Red Light Management, ROAR, songwriter-producer Savan Kotecha and entertainment lawyer Dina LaPolt.
Other artists collecting money through Stem include DJ Jazzy Jeff, Anna Wise, Chromatics and Poolside, with many acts using the platform to distribute music and monetize videos and streams from which they’d never reaped any revenue before, according to co-founder and CEO Milana Rabkin.
Stem, whose other co-founders include Tim Luckow and Jovin Cronin-Wilesmith, collects money earned from platforms such as YouTube and Spotify, quickly splits the payments among collaborators, aggregates and analyzes a user’s share of earnings from each distribution platform and prevents money from slipping through the cracks.
Rabkin says she isn’t trying to compete with record labels, encouraging both artists and labels to distribute music through Stem in order to maximize their revenue by better managing the supply chain. Artist managers, meanwhile, are starting to “build closer relationships with streaming services,” she adds, and can use Stem to place their music more directly on streaming platforms and track their payouts.
Though supply-chain management is the “least sexy part of the business,” Rabkin says, it’s those backend services that Evolution Media principal Ian Doody sees as Stem’s “secret sauce.”
“We think a lot is changing in the music space and that’s creating a lot of opportunity,” says Doody.
This story first appeared on Billboard.com.