Founders Fund backs Royal, a music marketplace planning to sell rights to songs as NFT – TechCrunch

Founders Fund and Paradigm are leading an investment in a platform that aims to marry music rights with NFTs, allowing users to buy shares of songs in the company’s marketplace, earning royalties as music in. which they have invested is gaining popularity.

The business, called Royal, is run by Justin Blau, an EDM artist who performs as 3LAU, and JD Ross, co-founder of home-buying startup Opendoor. Blau has been one of the most active and visible figures in the NFT community, initiating a number of efforts to explore how musicians can monetize their work in the crypto markets. Blau says when Covid cut his ability to tour he dug full-time into NFTs, in an effort to find a way to turn the power dynamic on “platforms that were extracting full value from creators “.“

In March, weeks before many heard about NFTs after the $ 69 million Beeple sale at Christies, Blau set their own record, selling a batch of custom songs and custom artwork for a value. collective of $ 11.7 million in cryptocurrency.

Royal’s investment announcement comes just as a wider bullish race for the NFT market appears to be reaching a climax with investors dumping hundreds of millions of dollars in cryptocurrency into community NFT projects like CryptoPunks and Bored Apes. . While visual artists interested in putting their digital works on the blockchain have seen a number of platforms spring up and mature in recent months to streamline the process of monetizing their art, there has been less effort focused on musicians.

Paradigm and Founders Fund are leading a $ 16 million funding round in Royal, with participation from Atomic – where Ross was recently a general partner. Ross’s Opendoor co-founder Keith Rabois led the case for Founders Fund.

The company doesn’t share much on its launch or product plans, including when the platform will actually start selling fractional assets, but it seems pretty clear that the company will be heavily leveraging the music and the position. of Blau in the music industry to attract early fans. / investors to the platform. Users can currently register for early access to the site.

As NFT startups pursue more complex ownership divisions that aim to help creators share their success with fans, there is plenty of speculation about how regulators will eventually treat them. While the 2017 ICO boom led many founders to receive letters from the SEC alleging securities fraud, entrepreneurs in this wave appear to be working a little harder to avoid this outcome. Blau says the startup team is working closely with legal counsel to ensure the startup remains fully compliant.

The company’s biggest challenge may be to ensure that the democratization of access to the purchase of music rights actually benefits fans of these artists or creates new fans for them, given the vast landscape of speculators. crypto looking to diversify. That said, Blau notes that there is a lot of room for improvement among the current distribution of music royalty ownership, which is widely split between labels, private equity groups and hedge funds.

“A true fan might want to own something long before a speculator even gets wind of it,” Blau explains. “Democratizing access to asset classes is a huge part of the future of crypto.”