Montréal-based Xposure Music has raised $42.5 million USD ($59 million CAD) in debt and equity to scout more Canadian and global independent talent using data analytics and artificial intelligence (AI).
The indie music catalogue buyer said on Monday that it had raised $42.5 million USD. The raise comes from a combination of debt from Andalusian Credit Partners and equity from family offices and individual investors, including Canadian investor and Seattle Kraken minority owner Mitch Garber.
“The real thing we’re cracking is predicting how these songs will continue to perform over time.”
Gregory Walfish,
Xposure Music
Xposure Music’s business model relies on parsing streaming data from indie artists. Its founder and co-CEO, Gregory Walfish, told BetaKit on Tuesday that music distributors—middlemen who sell artists’ works to streaming platforms like Spotify, and sometimes take a cut of royalties—compile reports about how their music performed. Xposure’s digital platform ingests these reports to “underwrite” its deals to buy artists’ catalogues for a lump sum and collect future royalties.
The firm plans to use the funding to buy more catalogues from artists that its proprietary analytics platform shows are headed for long-term streaming success.
“The real thing we’re cracking is predicting how these songs will continue to perform over time,” Walfish said in an interview.
He added that Xposure only buys songs that have been out for more than two years, and therefore have more data to work with. Its platform uses AI-driven algorithms trained on streaming data and the firm’s previous deals.
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Founded in 2021, Xposure began by offering musicians the opportunity to have their music heard by a record label for a fee. In 2023, it pivoted to buying catalogues and pursuing a tech-enabled business. Now, it has signed more than 100 artists, which include up-and-coming acts in genres like hip-hop and trap, afrobeats, EDM, and indie pop. Walfish claimed that its deals over the past year represent roughly 700-percent growth.
Xposure also partnered with indie music distributor Too Lost earlier this year to speed up its acquisitions and distribution activity.
With the new funding, the 10-person team is eyeing more deals with Canadian artists, who Walfish says need more opportunities to get their music funded.
Government funding of Canadian music has traditionally come through the Canada Music Fund, which had its funding topped up to $48 million CAD in the most recent federal budget, after independent music organizations advocated for its re-up.
According to the federal government, the Fund supports approximately 5,000 Canadian projects every year for recordings, touring, award shows, and other promotional events. It also provided $139 million over three years before that, which kept some live music venues afloat during the pandemic.
“We’re offering a lot more than some of those programs,” Walfish said. “Those are really great, but there’s more capital needed.”
Feature image courtesy Xposure Music.