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 Ventures, with participation from TheVentureCollective, ABBA member Agnetha Fältskog and Savan Kotecha.
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 doesn’t acquire rights from artists via the fund.
If, for example, Snafu’s 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. Snafu says that once the contract is over, and the artist has recouped, the artist keeps ‘full ownership of their material’.
(However, separate from the Snafu Song Fund, the company says that if an artist signs a full-label deal with Snafu, they split the master rights 50/50.)
Mira Howard, who leads Snafu’s Song Fund, says that “in just a few months,” Snafu has “paid almost $2 million in advances to independent artists” via the Snafu Song Fund. Snafu says that it has worked with over 30 artists via the fund so far.
“Rather than focusing on generative AI, our intent has always been to craft algorithms that spotlight undervalued talent across the globe.”
Ankit Desai, Snafu Record
Said Snafu Records CEO & founder Ankit Desai: “When we founded Snafu, we had already recognized that AI was poised to be a catalyst for change in the music world.
“As creators at heart, we wanted to leverage this technology to uplift the numerous talented artists worldwide. 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. We got into this business because we were touched by the unifying power of music.
“We see that our goal is to use technology to bring people together with other people, not together with another algorithm.”
Mira Howard, who leads Snafu’s Song Fund added: “The response has been tremendous. In just a few months, we’ve paid almost $2 million in advances to independent artists.
“What’s more, many of them, including Edo and Jo and Matt Duncan, have more than doubled their monthly listenership since joining Snafu’s Song Fund. We are excited about what lies ahead.”
“What Snafu is doing with Snafu’s Song Fund, using AI to identify artists for financial support, can allow more artists to earn a living from their art.”
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. What Snafu is doing with Snafu’s Song Fund, using A.I. to identify artists for financial support, can allow more artists to earn a living from their art.
“That’s 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.
Music Business Worldwide