Update, May 17th: As Techstars Music readies for its Demo Day on May 18th, the accelerator tells Rolling Stone it has also brought on Korean entertainment company HYBE, parent company to BTS’s label Big Hit Music, as a new investor partner for the program. HYBE joins music companies like Sony, Warner Music Group and Quality Control and will part of the program for the 2022 class onward. HYBE, alongside other Techstars Music companies, also participated in a recently closed $2.2 million seed round for Fave, a member of the Techstars Music 2021 class.
“We are looking forward to working with Techstars Music and the global community of music startups to grow and expand the global music business,” Paul Sung Woo Choi of HYBE Vision Lab said in a statement. “We’re also excited to work alongside the other member companies to bring the world together through innovation, technology, culture and entertainment.”
Seed accelerator Techstars Music is partnering with Rolling Stone to showcase its 2021 class of promising startups across music, media, and technology — bringing its annual Demo Day event exclusively to Rolling Stone’s Twitch channel on May 18th.
Techstars Music began its annual accelerator program in 2017 with investment partnerships from some of largest and most influential companies in music and tech, including Sony, Warner Music Group, Amazon Music, Quality Control, Concord, HYBE, and Peloton. The accelerator revealed its latest round of 11 winning startups earlier this year. During the May 18th Demo Day, the companies in the class will showcase their projects to the public for the first time, court future investors, and share job opportunities.
This is Techstars Music’s first class since managing director Bob Moczydlowsky pledged that 50 percent of the companies in the program would come from diverse backgrounds; the decision came after Techstars performed an internal audit and found that, out of the 40 companies it had invested in, just one had a black CEO and only five CEOs were women. Moczydlowsky tells Rolling Stone that he is committed to the 50-percent promise for every future class, adding that a focus on championing marginalized communities is as much a pragmatic decision of good investing as it is a measure to right societal wrongs.
“When we look at last year, it’s impossible not to acknowledge the gigantic social justice movement happening in culture,” Moczydlowsky says. “Black culture and gay culture drive music culture, and music culture drives planetary culture. If our job as venture investors is to invest in companies solving problems for the global music business and we’re not acknowledging the role these communities play in the music business and the culture that it creates, we’re not going to get good returns as investors.”
Companies from previous Techstars Music classes include Endel, which closed a $5 million Series A last year and created an AI lullaby with Grimes, as well as celebrity texting platform Community, which was known in the accelerator’s first class as Shimmur before rebranding with investment from Guy Oseary and Ashton Kutcher’s Sound Ventures. Over the previous four years, the 40 companies launched out of Techstars Music have raised over $150 million, and the combined funding behind the 2021 class of startups prior to Demo Day — $4.5 million — is the highest total for any class in five years, according to executives.
This year’s class is an eclectic mix of startups ranging in focus from apparel, ticketing, marketing, and licensing. Among the companies are superfan social networking startup Fave, which will make a major funding announcement during the Demo Day stream, and sneakerhead site Rares, which seeks to turn valuable shoes into an asset class by allowing anyone to buy partial ownership of shoes in an IPO-like offering. Rares bought Kanye West’s Air Yeezy shoes for $1.8 million last week and will announce the date for the Yeezy IPO during the stream.
While the annual program is called a “music accelerator,” many of the companies selected for each class focus on broader services and value propositions that could change the way the music business works.
“The reason you see Warner and Sony contribute capital to the program is, it’s our job to show them what might be essential parts of the music business in three to five years,” Moczydlowsky says. “You wouldn’t think of Rares as a music company. But the very first two assets they’ll IPO are valuable because of their connection to music and hip-hop culture. On the surface, it may not seem like it, but it’s very much a music company. These companies are revealing the way the music business will evolve and grow in the future.”
All of the companies featured in next week’s Demo Day stream, viewable only on Rolling Stone‘s Twitch channel, are below.
555 Comic: Tokyo-based startup that tells stories on Twitter and Instagram using virtual influencers the company designed.
BlackOakTV: Subscription video streaming service focused on content for black audiences.
Creative Futures Collective: A networking nonprofit designed to bring leadership employment opportunities for those in marginalized communities. Techstars donated to the Collective and doesn’t hold an equity stake in the company.
Fave: A social networking app for superfans. Those on the app make videos and interact with other superfans, competing for clout and rewards.
HappsNow: A ticketing service that also provides data analytics, marketing and customer support features.
Holotch: a 3D livestreaming company that allows fans to view streams and holograms from their phones.
Music Tech Works: A music rights company to streamline music licensing. It has a database detailing the ownership of over 100 million songs.
Westcott Multimedia: An advertising company that helps launch ad campaigns around catalog music.
Rares: A site that aims to allow buyers to purchase shares in valuable shoes the same way they could buy stocks on the stock market.
Remetrik: Music accounting software that helps music companies streamline their royalty accounting and other data.
Volta: Software to help artists create interactive, mixed-reality digital performances.