Another day, another web3 music company raises millions of dollars in funding, aiming to capitalize on artists’ most devoted followers by facilitating a more personal connection between artists and fans.
In an increasingly crowded web3 music scene, London-based startup TRAX on Tuesday (January 16) said it has raised 314,000 $ICP (approximately USD $2.9 million at the time of raise) in a decentralized funding round conducted on the Internet Computer ($ICP) blockchain.
This injection, completed on December 23, 2023, allows TRAX to operate its decentralized autonomous organization (DAO) guided by the holders of its $TRAX tokens. The funds will be allocated to TRAX DAO’s treasury, with token holders deciding on how they are utilized.
With a war chest of about $4 million, TRAX differentiates itself by acting as a content aggregator and social marketplace, catering specifically to music artists and their die-hard fans, often referred to as “superfans.”
This demographic, according to Goldman Sachs‘ Music in the Air Report, represents a $4.2 billion addressable market and spends 80% more on music per month compared to casual listeners. Goldman Sachs expects the monetization of superfans to add $2 billion of incremental revenue for streaming platforms by 2027 and $4 billion by 2030.
“[Fans are] looking for a less anonymized music experience. When a fan buys content on TRAX, they’re actively building a relationship with artists that supports future projects and brings everyone in the community closer together.”
Tom Stuart, TRAX
By facilitating exclusive content drops and events, TRAX aims to help artists cultivate closer relationships with their superfans and generate higher revenue. This aligns with broader industry trends, as evidenced by recent statements from Universal Music Group CEO Lucian Grainge, who emphasized the significance of cultivating superfan experiences in driving revenue.
“The next focus of our strategy will be to grow the pie for all artists, by strengthening the artist-fan relationship through superfan experiences and products,” Grainge said earlier this month.
TRAX co-founder and COO Henry Wilson explains that fans are “looking for a less anonymized music experience. When a fan buys content on TRAX, they’re actively building a relationship with artists that supports future projects and brings everyone in the community closer together.”
About three months ago, TRAX’s Class of ’24 artist campaign facilitated ten up-and-coming global acts including UK climbers DEIJUVHS and Master Peace, who celebrated unreleased music with their top fans.
TRAX says it is now looking to onboard and grow more artists in the superfan economy.
The completion of TRAX’s funding round follows closely on the heels of other web3 music platforms securing notable investments. Recent examples include Tune.FM, which raised $20 million from LDA Capital, and Sona, founded by DJ TOKiMONSTA, which launched its web3 music streaming platform after securing $6.9 million in a seed round.
Swedish platform anotherblock, which lets fans invest in music by buying NFTs, raised an additional €4 million (USD $4.3 million) in an investment round in May 2023.
Back in July, UMG said in a research into music streaming subscribers that “about 30% are superfans of one or more of our artists.”
Music Business Worldwide
