Startup Stem has raised $8 million in a venture capital funding round that it will use to build tools to enable music artists to get paid for their work in an easier and more efficient way.
TechCrunch reports that the funding round was led by Evolution Media and Aspect Ventures, along with several other strategic investors and continuing participation from Upfront Ventures.
While there are plenty of music streaming services available, getting paid can be complicated for the music artists — especially if there are multiple people collaborating on the same song. Stem works to collect the revenue from those tracks in disparate platforms and places it into a sort of escrow. It then pays out the music artists based on a previously agreed-upon level of involvement and revenue share.
The company said the music artists should start getting data within the first 30 to 60 days of publishing. Aside from earnings, artists can also get information on their listeners so they can focus on their preferences.
“A lot of the new tools that have been created in the FinTech space have really been focused on the services that have enabled independent small businesses to grow on their own,” said Stem co-=founder Milana Rabkin. “Artists and creators are no different; the problem is no one’s created tools that cater to them. If you look at Intuit, you have Mint, but for an artist with unpredictable income and difficult to track revenue streams, [it’s different]. You can plug in your bank account, but Intuit and Mint don’t plug into iTunes or YouTube or Spotify.”
Right now Stem is in charge of the payment process but is raising venture capital to build the tools it has so other distributors can use eventually use it. And while the company says its services aren’t competitive with music streaming sites, it will have some competition. For example, Kobalt raised $75 million at a $775 million funding round last month, and each of these services — like iTunes or Spotify — may end up simplifying their artist tools enough so it won’t be so complicated in the future.