Paradigm and Founders Fund are leading investments in a platform that aims to combine music rights with NFTs. Users can buy shares of songs through the marketplace, earning royalties when the music gains popularity.
Royal is headed by Justin Blau (an EDM artist who performs as 3LAU) and JD Ross (co-founder of Opendoor, a home-buying startup). Blau is one of the most prominent figures in the NFT community. He launched a variety of initiatives aimed at exploring how musicians could monetize their work via crypto markets. Blau claims that COVID had cut his touring ability and he began to look into NFTs full time, hoping to change the power dynamics of “platforms that were extracting every value from creators.”
Blau broke his own record by selling custom songs and artwork worth $11.7 million in cryptocurrency back in March. This was weeks before most people would hear about NFTs after the Christies sale of $69 million Beeples.
Royals announcement of investment comes at a time when a wider bull run in the NFT market seems like it is reaching fever pitch. Investors are dumping hundreds of millions of dollars worth cryptocurrencies into community NFT project such as CryptoPunks or Bored Apes. Visual artists are increasingly interested in using the blockchain to monetize their work. However, there has been less attention given to musicians.
Paradigm and Founders Fund lead a $16 million seed round in Royal. Atomic is also participating. Ross was previously a general partner. Ross was co-founder of Opendoor, Keith Rabois was the lead for Founders Fund.
Although the company has not shared much information about the launch or product plans, it is clear that Blaus music will be used heavily by the company to attract early investors and fans. You can sign up to get early access to the site right now.
NFT startups are pursuing more complicated ownership splits to share creators success with fans. There is a lot of speculation about how regulators will treat them. Despite the fact that many founders received SEC letters in 2017 alleging securities fraud, this wave of entrepreneurs seems to be trying harder to avoid such a fate. Blau states that Blaus startup team works closely with legal counsel in order to make sure the startup remains compliant.
Given the large number of crypto speculators seeking to diversify, the company may face a bigger challenge: ensuring that everyone has access to music rights. Blau acknowledges that there is still room for improvement in the current ownership distribution of music royalties. It is largely distributed among labels, hedge funds, and private equity groups.