Sound.xyz, a platform where artists set the prices for their music NFT releases, has raised a $20 million round led by existing investor Andreessen Horowitz’s A16z Crypto fund, with participation from venture firms Palm Tree Crew, A Capital, Sound Ventures, Collab + Currency and Scalar Capital. Three artists also participated in the round: rapper Snoop Dogg, OneRepublic frontman Ryan Tedder and hip-hop producer Tay Keith.
The new funding round — the second following a $5 million raise in 2021 — will help Sound.xyz hire people, particularly in engineering and design, says co-founder and CEO David Greenstein. “I think one of the things that we’re trying to do is build a world-class product. And so in order to do that, you’re gonna have to recruit the best of the best.” Sound.xyz has done “zero marketing” to date, he says, and the funding provides the opportunity for events and online marketing.
Based in New York City, Sound.xyz uses modern web3 technology to address two age-old goals in the record business: how to break new artists and how to make sure artists make money. The platform allows artists to release new music as a set of NFTs — non-fungible tokens — that can be streamed for free and purchased by fans. Artists are able to set the prices for their releases, giving them an opportunity to break away from minuscule per-stream streaming royalties.
“What if, hypothetically speaking, one person wants to give a lot of money for a song or artist because it’s their favorite song?” says Greenstein. “We literally block that experience today. There is no way today on any streaming service to give an artist $5 for their music or their song.”
Greenstein, a former Atlantic Records intern who was previously a product manager at music streaming service Pandora, built Sound.xyz to encourage fans to become early supporters of artists and show off their music collections. Each release on Sound.xyz is a numbered NFT, with the earlier supporters getting the lower numbers. The company hopes that giving its customers bragging rights will incentivize fans to discover new music and become early backers of artists on the platform.
Sound.xyz aims to take what makes social media apps like TikTok so effective but focus on the artists and fans rather than the video creators. In the world of social media, sharing and re-posting are expressions of support. At Sound.xyz, fans show their support by building and showing off their music collections. “Collects are the new re-posts,” says Greenstein. “It’s the easiest way to signal that you really care and believe in the song and the artist.”
Over the last 18 months, about 500 artists invited to the platform have uploaded about 1,600 songs to Sound.xyz, resulting in $5.5 million paid out to artists. Those numbers are likely to increase dramatically in the coming months: Starting today, Sound.xyz is opening the platform to all artists. “If this scales,” says Greenstein, “I think there’s an opportunity to pay music a lot more for what it’s worth.”
