As billions of dollars are being spent on music catalogs, far less is invested in actual music companies. Is there opportunity there? Matt Pincus seems to think so.
One of music’s more successful entrepreneurs in the last decade, Pincus now has $200 million at his disposal through his three-year-old holding company, MUSIC, a joint venture with merchant bank LionTree. The MUSIC co-founders are joined by new backers JS Capital Management and Schusterman Family Investments, the company announced with the funding news on Thursday (May 26).
The amount of the funding should make Pincus an influential figure in shaping how creators and rights holders will make money from new digital platforms, blockchain products and the metaverse. Since forming MUSIC as a joint venture with LionTree in 2019, Pincus has invested in music collaboration platform Splice, financial services organization HIFI and ticketing platform Dice, among others. Previously, Pincus founded SONGS Music Publishing, which was acquired by Kobalt Capital for a reported $160 million in 2017. He joined LionTree, the financial advisor on the SONGS acquisition, in 2018 as an executive in residence.
“Institutional investors have been flocking to music because of the uncorrelated returns and strong growth the industry provides,” said Pincus in a statement. “But for most investors, music is just another asset that fits in their portfolio. At MUSIC, we invest in talent, creativity, repertoire and innovation. Good people reside all across the capital stack – from venture to growth to private equity to yield. To make the right investments in music, you need to bet on talent with flexible capital, ready for the long term.”
The war chest will make long-term investments in three areas of the music business, according to Thursday’s announcement: technology, record labels and music publishers and Web3. “Matt’s independence, track record, and the relationships he’s built across the ecosystem give him a unique perspective on where music is headed,” Aryeh B. Bourkoff, founder and CEO of LionTree, said in a statement.
JS Capital Management, a private investment firm run by Jonathan Soros, son of famed investor George Soros, “is focused on partnering with great management teams that are providing solutions in large and, often, fragmented markets,” Salil Seshadri, chief investment officer of JS Capital Management, said in a statement. According to Fintel, JS Capital Management has $1.29 billion under management and owns stakes in such publicly traded companies as concert promoter Live Nation, MGM Resorts International, Expedia Group and Hertz Global Holdings. “In the case of MUSIC,” added Seshadri, “the partnership with Matt and Aryeh allows us to be part of changing trends in content creation, technology, and the continued shift towards experiences over things.” Schusterman Family Investments has recently invested in a handful of artificial intelligence startups such as Navina and Retain.ai.
MUSIC has a small team in New York, where Pincus is based. Pincus, who sits on the board of HIFI and Splice, will handle MUSIC’s capital allocations and oversee the governance of the investments.
