Why we invested in Reveel
Web 3.0 has changed the game for creators.. especially music NFT creators.
At Anamcara, we consider “creators” to be the smallest of SMBs. The creator economy allows online creators to reach out directly to their audience to gain funding / income. To put this into perspective, the creator economy market size is worth over $104bn, with investors allocating $1.3bn into the space in 2021. About 50m people worldwide consider themselves to be creators, out of whom ~2m consider themselves to be professional creators.
A specific area of the creator economy that is growing exponentially are NFTs. In 2021 alone, sales of NFTs reached $25bn increasing from $95m in 2020. This rapid increase can be attributed to huge NFT sales and an overall increased perceived value of an NFT. While the most expensive known NFT sale was $92m (Pak’s The Merge), the average price range is $100 to $1k. In context of the continued rise and popularity (and infamy!) of Web 3.0 and the global mainstreaming of crypto, it is predicted that the total value of the NFT market will reach $35bn in 2022, scaling even further to $80bn in 2025.
Whilst many simply view NFTs as digital art collectibles, the music industry is using NFTs to help solve a problem that has been rooted in the industry for many years. The traditional revenue within the music industry is distributed 50:50. 50% of the music royalties go towards the artist, and the rest is shared among a number of parties, which include (but are not limited to) agents, lawyers, and distributors
Rex Woodbury (Index Ventures) recently shared an interesting newsletter titled Innovation in Media: Reinventing how culture and media spread. In this piece he used a flowchart to illustrate the economics of music. See here below the economics flow of a $9.99 Spotify subscription —
Artist and songwriters receive only a fraction of the money going around.
Artists are beginning to change this model and are using NFTs to spearhead this. In March 2021, the Kings of Leon launched their NFT album (the first of its kind from a signed artist), which led to sales in excess of $2m. Similarly, Grammy Award winning artist, Kanye West, recently announced he declined $100m from Apple Music to stream his new album Donda 2. He cited that he believed streaming services are undervaluing artists, calling for an “anti-streaming revolution” and how “it’s time to take control”. He went onto say that “today artists get just 12% of the money the industry makes. It’s time to free music from this oppressive system. It’s time to take control and build our own”. We believe that more artists, particularly of similar profile, speaking out about music ownership will help drive the adoption of music NFTs.
This bring us to Reveel. Why did we invest ?
- Strong tailwinds and exponential market growth — described above.
- Reveel is solving a real pain point — the complexities of royalty tracking and redistribution within the music industry is not a new phenomenon and represents a huge problem for artists and collaborators in the industry. Reveel offers Web 3.0 infrastructure/back end for music NFT creators to get paid.
- We are entering a new era of “ownership” — Web 3.0 is the internet owned by the builders and users, orchestrated with tokens. In Web 3.0, ownership and control is decentralised. Users and builders can own pieces of internet services by owning tokens, both non-fungible (NFTs) and fungible. In Chris Dixon’s words “NFTs = a unit of ownership on the internet”. Over the past year we have seen a huge influx of VC activity in this space i.e. Royal (backed by a16z, Paradigm, Coinbase Ventures et al.), Autograph (backed by Haun Ventures, a16z, Kleiner Perkins) and Mint Songs (Dapper Labs and Coinbase Ventures)
- Passionate, visionary team with clear distribution advantage — both Adrien (co-founder & CEO) and Walid (co-founder & CTO) hail from Geneva and met in high school. Adrien founded an independent record label and was the band manager of Najavibes. He studied for his MBA at ESADE in 2016 where he started learning about blockchain. Adrien’s industry knowhow and network is an important reason why we felt comfortable. Typically startups in the music NFT space have to attract top music artists to help them promote the platform (i.e. Nas for Royal) and we believe Adrien has an unfair advantage here. Walid is a fullstack and Web 3.0 developer with UX/UI design experience. Walid was the first employee and lead developer at The Pigeonhole (an e-publishing start up) and scaled the platform from 0 to 40,000 subscribers.
- Partnerships with leading music artists — the Reveel team already lined up top-tier artists for proof of concept. These artists include Arabian Prince (Founding member of NWA), Kiesza (UK №1 with “Hideaway”), and Harrison First (Up-and-coming crypto-native artist).
- Anamcara’s domain expertise — we know we can add value. Namrata, our Venture Partner, is a Web 3.0/NFT/Crypto expert and is currently the VP of Engineering at Autograph. We understand the space well and can help guide the team as they grow and scale the platform.
We are excited to be on this journey ! We are joined by Binance Labs, Moment Ventures, Depo and Underdog.