Montreal Xposure Music has raised US$42.5 million ($59 million CAD) in debt and equity to find more independent talent in Canada and around the world using data analytics and artificial intelligence (AI).
The indie music catalog buyer said Monday it has raised $42.5 million. The raise comes with 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 trying to do is predict how these songs will continue to sound over time.”
Gregory Walfish,
Xposure Music
Xposure Music's business model is based on analyzing streaming data from indie artists. Its founder and co-CEO Gregory Walfish told BetaKit on Tuesday that music distributors—middlemen who sell artists' work to streaming platforms like Spotify and sometimes receive a cut of royalties—compile reports on how their music is performed. Digital platform Xposure accepts these reports to “sign off” its deals to buy artist catalogs for a lump sum and collect future royalties.
The firm plans to use the funding to buy more of the catalogs of artists that its proprietary analytics platform shows have long-term success in streaming.
“The real thing we're trying to do is predict how these songs will continue to sound over time,” Walfish said in an interview.
He added that Xposure only buys songs that were released more than two years ago and therefore have more data to work with. Its platform uses artificial intelligence-based algorithms trained on streaming data and the firm's previous trades.
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Founded in 2021, Xposure began by offering musicians the opportunity to have their music heard on a record label for a fee. In 2023, the company switched to purchasing catalogs and developing high-tech business. He has now signed over 100 artists, including up-and-coming artists in genres such as hip-hop and trap, Afrobeat, electronic dance music and indie pop. Walfish said his business volume over the past year has been about 700 percent.
Earlier this year, Xposure also partnered with indie music distributor Too Lost to accelerate its acquisition and distribution efforts.
With the new funding, the 10-person team is looking at making new deals with Canadian artists, who Walfish says need more options to finance their music.
Government funding for Canadian music has traditionally come through the Canada Music Fund, which reached C$48 million in funding in the latest federal budget after independent music organizations advocated its relaunch.
According to the federal government, the Foundation supports approximately 5,000 Canadian recording, touring, awards and other promotional projects each year. It also provided $139 million three years earlier, helping keep some live music venues afloat during the pandemic.
“We offer a lot more than some of these programs,” Walfish said. “It’s really great, but it requires more capital.”
Image courtesy of Xposure Music.
