Los Angeles-based distribution and services company Stem has secured $10 million in new financing.
The new financing brings Stem’s total funds raised since being founded in 2015 to $22m.
In addition, as of this month, Stem claims to have distributed over $100m in royalty payments since its founding in 2015.
Stem’s previous backers have reportedly included the likes of Scooter Braun, Mark Cuban, Vayner Capital, Upfront Ventures, Aspect Ventures, Dina LaPolt and Savan Kotecha.
Today (August 26), the company has officially named what it calls “a highly strategic group of investors, senior advisors and Board Members”. These include:
- Coach K, Co-Founder and COO of Quality Control Music home of Lil Baby, The Migos, City Girls and Lil Yachty;
- Mark Gillespie, manager of Calvin Harris and founder Three Six Zero;
- Various individual managers under Red Light Management;
- and Baron Davis, two-time NBA All-Star.
Stem is led by CEO Milana Rabkin Lewis (pictured), who spent five years as a Digital Media Agent at United Talent Agency (UTA) before co-founding the company in 2015.
In June last year the company revealed that it would be pivoting away from elements of its original business model by turning off the ability for any DIY artist to distribute their music through its platform.
Stem subsequently cut ties with tens of thousands of DIY artists whose music it previously distributed, migrating them over to its former rival in the space, TuneCore.
The company then launched ‘Stem Direct’ exclusively for its top-performing acts (and future signings), as a VIP offering which the firm described as “a concierge member service to support our top talent”.
Earlier this year, the company hired Brendan Kao, formerly of PeerStreet and Zest Finance, as Chief Product Officer; and in 2019, Mike Vaughan, former COO of Venmo joined Jennifer Fonstad, co-founder and General Partner at Aspect Ventures and Kara Nortman, Partner at Upfront Ventures as board members.
In February Stem launched a new financing product called Scale, backed by CoVenture via a capital partnership, that would enable the company to deploy over $100m of advances to both its independent artist and record label clients.
“With this new round of financing, we are focused on accelerating the portfolio of products offered to our artists.”
Milana Rabkin Lewis, Stem
Scale provides advances in the form of a revolving credit line with the ultimate draw limit and fee based on their net share of income.
Artists that have used Stem’s services include the likes of Zac Brown Band, Foster the People, Jeezy and Desiigner, New Kids on the Block, independent record label Big Loud Records, Freebandz, Future’s record label; and emerging artists Brent Faiyaz, Justine Skye, bbno$, LP, Toro y Moi, and Poolside.
Milana Rabkin Lewis, CEO of Stem, added: “Stem was created to provide independent artists with the ability to manage and grow their careers and teams autonomously.
“With this new round of financing, we are focused on accelerating the portfolio of products offered to our artists. We’ve assembled the top players in music who have built careers of the world’s top artists to amplify our efforts.”
“The automation around the split process is seamless which we see as vital for the growth of all artists and the economy of their output.”
Kevin ‘Coach K’ Lee
Kevin ‘Coach K’ Lee, co-founder and COO of Quality Control Music, added: “We are proud and excited to be a part of Stem.
“The company is a leader in innovative products and will advance the way the entire music community handles its financial and administrative business.
“The automation around the split process is seamless which we see as vital for the growth of all artists and the economy of their output.”Music Business Worldwide