Music Investment Marketplaces – Part 2: The First Wave of MIM Start-ups, 2014-2018

When SongVest ceased operations in 2013 and Sean Peace started building Royalty Exchange (part 1), the first copycats were trying to establish music investment marketplaces in Europe. Unlike in the United States, it is not possible to sell music rights in most European countries; they can only be licensed to users. This is why big business has not been able to expand beyond the Anglo-American sphere by acquiring large music catalogues. Instead, new business models such as music investment marketplaces have emerged to participate in the boom in music rights sales. Numerous music investment marketplaces have been established in Europe since 2014, using different approaches to attract small investors.

Music Investment Marketplaces – Part 2: The First Wave of MIM Start-ups, 2014-2018*

Global Rockstar – the pioneer from Austria

In Vienna/Austria, the singer/songwriter and music manager, Christof Straub, founded Global Rockstar as a record label, music publisher and crowd investment platform for young and emerging artists in 2014. Musicians can submit a recording of a song to Global Rockstar’s A&R department, which decides whether the artist is signed to the label. If the artist is also a songwriter, there is the option of signing a publishing contract as well. Thus, Global Rockstar as label and music publisher controls the master and publishing rights of the signed artists. However, independent artists can also use to platform to pre-finance their music productions. Of the 94 productions released in 2024, 80 were by independent artists controlling their rights by themselves and 14 were by artists signed to Global Rockstar.

The artists present their music production projects on the Global Rockstar webpage as “opportunities” for investment. The artists define how much a share in their project costs, with shares ranging from 0.1 per cent to 100 per cent being offered for purchase within a predetermined period. For example, the Austrian musician KRYSTOF offers a 0.1 per cent share in his song “Broken Melody” for EUR 10, which corresponds to a total purchase price of EUR 10,000 for the entire song.

The issue amount for the individual “opportunities” can range from EUR 1,000 to 20,000, resulting in different prices for the shares to be purchased. In most cases, the cost of a 0.1 per cent share in a song is well under EUR 10. The shares can be purchased either in Euros or in the form of Non-Fungible Tokens (NFTs), with the NFT transactions stored on the Ethereum blockchain. However, investors do not receive shares in the master or publishing rights, but participation rights in the form of a claim against Global Rockstar for payment of a percentage of the net proceeds from the commercial exploitation of the rights in the amount of the share acquired by the investor. This approach is explained by the fact that under Austrian and EU copyright law, rights cannot be sold but only licensed for use. This is a significant difference from US copyright law, which also allows for the sale of the rights.

Global Rockstar aims to establish a trading platform, where music shares can be traded. However, participation rights are not tradeable. Actually, music shares in “opportunities” can only be bought but not be sold. And there is also no option to sell back shares to Global Rockstar once they have been purchased. If the net revenues from the commercial exploitation of the musical work are less than EUR 30.00 per year for two consecutive calendar years, Global Rockstar has the option to terminate the exploitation without further payment obligations to the investors. This makes Global Rockstar’s offer less attractive, and indicates ways still need to be found to overcome the legal restrictions to achieve the goal of a trading platform for music shares.

The Rise and Fall of Vezt

In the US, Vezt tried to fill the gap left by SongVest and competed with the newly founded Royalty Exchange platform. In 2016, the music managers Steve Stewart and Robert Menendez founded Vezt in Los Angeles as a platform for artists, songwriters and other IP holders to monetize their rights by so-called Initial Song Offering (ISO). After a registration process, the IP holders uploaded their songs to the platform for a verification process by Vezt’s rights management team. After successful verification the IP holders started the ISO process by deciding on the percentage of the royalty income they wanted to put up for sale, the type of IP, the duration of the term to sell off the rights (reversion period) and the price for the shares. The investors could then buy an ISO share of a song, entitling them to a fraction of the royalties collected by Vezt, which was also recorded on the blockchain. For its service, Vezt took a 5 per cent fee of the royalty payouts. At the end of the reversion period, the royalty rights were transferred back to the IP holders. Despite a promising start, with two seed funding rounds in 2017 and 2019, raising more than US $1 million and expanding to South Korea, Vezt could not stabilize its business model and disappeared from the market.

Musicow – the Success Story from South Korea

Musicow was the first music investment marketplace established outside the US and Europe. Founded in April 2016 as Music Coin by Jeong Hyeon-Gyeong, Kim Ji-Soo and Seo Dae-Kyung in Seoul, it was launched in beta version in June 2017. In August 2018, Music Coin officially started its website for auctioning small fractions of claims in song royalties but re-branded as Musicow in April 2020. From January 2019 to June 2021, Musicow secured WON 34 billion (US $28.7 million) in three funding rounds from 10 investors including the Korea Development Bank, Hana Financial Investment Corporation, LB Investment and Premier Partners.

However, Musicow’s business model, buying fractional ownership in copyright claims to auction to small investors to trade the units among other individual investors, raised concerns from the Korean Financial Services Commission. After an extensive investigation, the FSC classified fractional ownership in copyrights as a legitimate type of investment, but Musicow was required to draw up measures to protect investors. This legal clarification ensured legal certainty and attracted further investment capital. In January 2022, the Korean private equity company STIC Investments injected US $167.9 million (WON 200 billion) in Musicow and further US $46 million (WON 60 billion) in May 2023, which makes STIC the largest shareholder of Musicow. Also in the first half of 2022, the Korean defence company Hanwha Group entered a joint venture with Musicow to launch its music rights trading business in the US and, therefore, invested US $5.9 million in Musicow.

However, a US $5 million deal between Musicow and Jay Z’s Roc Nation in January 2025 secured sustainable market presence in the US. Roc Nation become the second-largest shareholder of the Korean start-up with a 20 per cent stake made international headlines. The investment should help to position Musicow as a direct competitor of JKBX, which will be analysed later. However, Musicow’s growth was impressive. In September 2024, Musicow reported a user base of 1.2 million, responsible for transactions in the value of US $293 million.

Fanvestory – the Failed MIM from Estonia

At the same time, when Musicow launched its beta version in South Korea, Fanvestory started its music investment marketplace in Estonia. Fanvestory was founded in March 2017 by Birgit Karus, Kristjan Ulst and Juko-Mart Kõlar in the Estonian capital Tallinn as a music investment marketplace, where music fans could buy a piece of music from the artists, who got an upfront payment. In return the investors were entitled to the future royalties earned by the song. Fanvestory operated in a similar way to the Austrian platform Global Rockstar, by providing a crowdfunding platform to raise money for acquiring music licenses in a song and promising to pay back the investment with future license fees. Fanvestory’s sales revenue was generated from commissions on the artist’s sales and a fixed fee from each purchase transaction.

However, Fanvestory was unable to raise considerable investment capital to expand its business activities. The official business records, available on the Estonian authority’s online database, show that Fanvestory only generated relevant revenues until the first quarter of 2019 and that two employees were still listed until the second quarter of 2021. In 2023, it was announced that the Estonian music streaming platform Fairmus had acquired Fanvestory. At that time, Fanvestory’s equity was EUR 53,536 and it reported an annual loss of EUR 1,955 and negative working capital of EUR 4,380. Obviously Fanvestory has not managed to expand beyond the small Estonian music market and gain a foothold internationally. Currently, however, Fanvestory no longer appears to be active, because neither the original webpage works nor is there any reference to Fanvestory on the Fairmus page.

ANote Music– Innovation from Luxembourg

In January 2018, Marzio Schena, Matteo Cernuschi and Gregoire Mathonet founded ANote Music in Luxembourg. ANote Music is a fractional music rights trading platform allowing investors to buy shares in royalty streams and to trade them on the ANote Music platform. According to ANote Music’s Investors Booklet, the investment opportunities are limited to music catalogues that have generated a considerable royalty revenue stream in the past three years of at least EUR 10,000. Thus, on the website only 26 catalogues, in which investors can buy a share, are shown. The shares can be purchased directly from the rightsholders in an auction when a catalogue first appears on the platform. The share prices range from EUR 4 to 40 per share and entitle the investor to receive a proportional percentage of the future royalties cumulatively generated by the songs in the catalogue. However, ANote Music also provide a secondary marketplace, where catalogue shares can be traded.

The rightsholders/artists license a minority stake in the catalogue up to a maximum of 50 per cent to ANote Music but keep a controlling stake of at least 50 per cent. Therefore, ANote Music is the licensee of part of the music catalogue and the investors participate in the royalty streams, but do not own licensing rights. Therefore, ANote Music investors buy and trade participation rights in the music catalogues without controlling the underlying copyrights.

ANote Music’s revenue model is based on a 4 per cent fee on royalty distributions if the share was bought in an initial auction or an 8 per cent fee is applied, when the shares are resold on the secondary market platform. For 2023, EUR 500,000 were distributed to investors. With a revenue share of 4 per cent, it can be seen very quickly that ANote Music’s business model is not yet financially sustainable. ANote Music therefore relies on financial support, which it receives from public funds in Luxembourg on the one hand and from venture capital (VC) on the other, with VC investments of EUR 3.3 million in the company by mid-2023. The success of ANote Music will depend on whether further investors can be found to enable the company to expand internationally and to expand its offering and user base.

The founding of ANote Music marks the end of the first wave of music investment marketplaces. As the examples of Vezt and Fanvestory show, not all MIM providers succeeded in developing a sustainable business model. Nevertheless, a second wave of start-ups emerged in 2021, with numerous other music investment marketplaces springing up, particularly in Sweden, where an internationally successful songwriting scene provides a good basis for the music rights sales business.

Endnotes

Global Rockstar, “For artists”, n.d., accessed: 2025-03-13.

See Global Rockstar’s webpage: https://www.globalrockstar.com/opportunity

Global Rockstar, “Opportunity: ‘Broken Melody’ by KRYSTOF”, n.d., accessed: 2025-03-13.

Global Rockstar, 2022, Informationsblatt für Anleger gemäß § 4 Abs 1 Z 1 des Alternativfinanzierungsgesetzes (AltFG), pp. 2-4.

Ibid., p. 6.

TechWeek, “Vezt – A Financial Tool For Artists”, March 4, 2019, accessed: 2025-03-13.

Pitchbook, “Vezt”, n.d., accessed: 2025-03-13.

Musicow, “History”, n.d., accessed: 2025-03-17.

The Korean Economic Daily, “Music copyright trading platform Musicow revitalizes Korea’s startup scene”, November 22, 2021, accessed: 2025-03-17.

The Korea Bizwire, “Regulator Sees Fractional Ownership in Music Copyrights as Investment”, April 20, 2022, accessed: 2025-03-17.

The Korean Economic Daily, “STIC injects $168 mn in pre-unicorn Musicow”, January 18, 2022, accessed: 2025-03-17.

The Korean Economic Daily, “Music copyright trading platform Musicow attracts $46 mn from STIC”, May 23, 2023, accessed: 2025-03-17.

The Korean Economic Daily, “Hanwha, Musicow to launch JV in US for copyright trading abroad”, December 10, 2021, accessed: 2025-03-17.

The Korean Economic Daily, “Jay-Z’s Roc Nation to invest $5 mn in S.Korea’s Musicow”, November 4, 2024, accessed: 2025-03-17.

Global Economics, “Accumulated transaction amount of 420 billion won… ‘Music Cow’ advances beyond Korea to the US”, September 25, 2024, accessed: 2025-03-18.

See https://www.eu-startups.com/directory/fanvestory/, accessed: 2025-03-18.

Inforegister Estonia, “Fanvestory OÜ, registry code: 14221756”, March 17, 2025, accessed: 2025-03-18.

Ibid.

ANote Music, 2024, Investors Booklet, November 2024.

Ibid., p. 18.

ANote Music, “Creators: How It Works”, n.d., accessed: 2025-03-18.

ANote Music, 2024, Investors Booklet, p. 10.

Digital Music News, “European Royalty-Investment Platform ANote Music Announces €3.3 Million Funding Milestone, Institutional Investor Expansion”, July 31, 2023, accessed: 2025-03-19.

*This blog post is based on the report IP Finance in the Music Industry, which was commissioned by the World Intellectual Property Rights Organization (WIPO).