Matt Pincus-backed HIFI buys AI-powered artist funding startup The Music Fund

Business and financial management platform HIFI has acquired The Music Fund, a company that provides funding solutions for artists based on the streaming performance of their music on digital services like Spotify and Apple Music.

HIFI launched in the US last year with major league supporters including Matt Pincus, who joined HIFI’s board and is an investor via his financial vehicle MUSIC – a joint venture with LionTree.

The Music Fund uses Artificial Intelligence to power what it calls a “smart-pricing algorithm” that promises to offer artists up-front cash within 24 hours for a portion of their royalty income for a defined period of time.

The company says that it allows creators to retain 100% of their copyrights and all earnings from future releases.

Investors in The Music Fund include Warner Music Group and Techstars Music, which invited the company into the Techstars Music Accelerator’s class of 2019.

As part of the acquisition, The Music Fund co-founder and CEO John Funge joins HIFI as Chief Technology Officer and The Music Fund co-founder and CTO Thomas Jerde has been appointed Vice President, Data Science at HIFI.

HIFI advisory board members include Splice’s Steve Martocci and Will Page, formerly Chief Economist at both Spotify and PRS for Music.

In addition to MUSIC, backers of HIFI include venture capital firms Lerer Hippeau and Flybridge Capital.

Both Funge and Jerde have a deep background in data science and finance. They developed their first real-time, AI-based automatic music valuation model (AVM) at the Winton Group, one of the world’s leading systematic investment firms that had more than $30 billion in assets under management.

After becoming an independent company in late 2018, The Music Fund developed its process for artist funding. The company says that artists can get up to $50,000 within just 24 hours.

The acquisition will now power new artist funding options from HIFI.

Since its launch last year, HIFI says that it has seen “thousands of applications” for membership and is currently tracking “hundreds of millions of dollars in royalty income” on behalf of its creator members and their teams.

“The acquisition of The Music Fund will further HIFI’s ability to provide enhanced liquidity to artists of all levels.”

Matt Pincus

Matt Pincus said: “The key to equitable pay for artists is efficient revenue prediction across the earnings spectrum.

“The acquisition of The Music Fund will further HIFI’s ability to provide enhanced liquidity to artists of all levels.”

“Under John and Thomas’s leadership, The Music Fund has developed a funding solution that has been a gamechanger for artists, empowering them to finance their own projects while retaining their copyrights and ownership of their masters.”

Damian Manning, HIFI

Damian Manning, Founder and CEO of HIFI, said:  “Under John and Thomas’s leadership, The Music Fund has developed a funding solution that has been a gamechanger for artists, empowering them to finance their own projects while retaining their copyrights and ownership of their masters.

“Their automated valuation model will accelerate a new generation of financial products for HIFI members and partners.

“The addition of John and his team will be hugely beneficial to our creator community as we continue to build a technology infrastructure that financially empowers artists across all stages of their careers.”

“Damian and his team have built the leading financial platform for music creators and their teams available today.”

John Funge

Funge said: “Damian and his team have built the leading financial platform for music creators and their teams available today.

“Our prediction model enables us to underwrite a variety of short term financing solutions to artists at absolutely no risk to them, empowering them to record music, go on tour, or market current projects without having to sign away any long-term rights.

“As we join the HIFI ecosystem, we’re looking forward to leveraging our automated valuation model to deliver an entirely new class of innovative financial products to the music creator community.”

Techstars Music managing director Bob Moczydlowsky said: “We invited The Music Fund into Techstars Music because we recognized what an AI-powered funding model could achieve for both artists and lenders, especially when it didn’t rely on taking long-term rights. We’re excited to see HIFI and The Music Fund scale this empowering technology together.”

 Music Business Worldwide