Snafu launches AI-powered ‘Snafu Song Fund’ financing for indie artists backed by $7m round led by Pophouse Entertainment
Summary
Sweden-based Snafu Records has attracted a fair bit of industry attention since launching in February 2020 with $2.9 million in seed funding.In 2021, Snafu, a record label and A&R tool that uses artificial intelligence to discover new music, completed a $6 million funding round led by Pophouse Entertainment, with participation from TheVentureCollective, ABBA member Agnetha F\xe4ltskog and Savan Kotecha.The round came shortly after the company added Per Sundin, former CEO of UMG Nordics who signed Avicii and Tove Lo, and songwriter/producer Savan Kotecha as shareholders.Now, Snafu is announcing what it says is a new $7 million round of funding in equity and credit.The new funding round was led by Pophouse Entertainment and also brought along music manager Marc Jordan through his investment fund Blue Amber Investments, multi-platinum artist LP, Supercell co-founder Mikko Kodisoja, and Danish VC firm Blackwood Ventures.Sweden-based Snafu uses an AI A&R tool dubbed EMMA which it says has been trained to find undervalued artists based on a wide range of metrics.Snafu says that its proprietary algorithms analyze millions of data points from over 150,000 songs per week, identifying artists whose music is undervalued and needs amplifying.We then design deals that make sense for the project, deals where artists still feel independent, the company explains on its website.According to Snafu, EMMA has identified numerous rising stars for the Snafu Records label, such as the TikTok hit song maybe my soulmate died by iamnotshane, which has amassed over 75 million streams across all platforms since its release last year.Snafu says it has signed around 75 artists in total, including the likes of Hit-Boy, iamnotshane, Bayli and RANI.Most recently, Snafu Records started using its AI algorithm to identify catalogs of independent artists that it says could be reaching wider audiences.Snafu then invests in these artists through up-front cash advances and what it calls catalog growth strategies via its newly-launched Snafu Song Fund.Snafu says that these advance deals see the label license songs for an agreed period and that it doesnt acquire rights from artists via the fund.If, for example, Snafus AI identifies a song by an independent artist and projects that the song would generate a certain level of revenue over a two-year period, the label would offer the artist an advance and a short-term contract of around two years. Rather than focusing on generative AI, our intent has always been to craft algorithms that spotlight undervalued talent across the globe.Added Desai: There is already a wealth of incredible human-created music being released every day that does not have the opportunity to be heard. In just a few months, weve paid almost $2 million in advances to independent artists.Whats more, many of them, including Edo and Jo and Matt Duncan, have more than doubled their monthly listenership since joining Snafus Song Fund. We are excited about what lies ahead.Marc Jordan, manager and investor in Snafu Records, said: One of the biggest challenges independent artists face is financial.It costs money to tour, to finish an album, or even to make a living as a creative. to identify artists for financial support, can allow more artists to earn a living from their art.Thats where the future of the music industry is headed.Elsewhere in the music financing space, financing startup Duetti, which acquires indie artists music rights, recently closed its $32 million funding round from investors including Viola Ventures and Viola Credit, Roc Nation, Untitled and Presight Capital.The startup, founded by former TIDAL Chief Operating Officer Lior Tibon and a former Apple Music Business Development executive, Christopher Nolte, claims that it has become an essential business tool for over 60 independent artists including CVBZ, Sylvan LaCue, and Croosh, and that it has partnered on deals across over 100 tracks.To date, Duetti claims that it has facilitated music rights acquisitions that saw artists receive up to $400,000 per deal.