Sofar Sounds Raises $25M From Investors: Here's How It Plans to Use the Funds
On the heels of its tenth anniversary, concert startup Sofar Sounds has something new to celebrate. The company, which organizes shows with secret lineups in donated spaces across the globe, has raised $25 million in new funds from investors.
The funding round is led by Battery Ventures and Union Square Ventures, along with existing investors Octopus Ventures and Virgin Group, whose founder Richard Branson was an early investor in Sofar back in 2016.
Founded by Rafe Offer, who hosted the first Sofar in his London living room in 2009, the company now hosts intimate gigs in 433 cities worldwide, which listeners enter an online lottery to attend. If selected, guests pay between $15 and $30 to attend the show with a lineup of three surprise performers, each hand-selected by the Sofar team. The idea? To put the focus of live music back on, well, the music -- and help local acts reach new ears.
With the new funds, Offer tells Billboard that the goal "is making sure that as we grow, we grow with grace, and that the events as they are today feel the same as they did when we started it."
CEO Jim Lucchese, who took over the role from Offer (now executive chair) in February, says that approach is two-fold. First, Sofar hopes to boost revenue for its artists -- an issue that has struck a nerve recently, with some artists arguing that Sofar performance slots don't pay enough.
At ticketed Sofar shows, performers receive $100 each (regardless of the size of the group), while the majority of the dough goes toward paying performing rights organizations, Sofar's 80 full-time staffers and for venue insurance. But the vast majority of Sofar cities operate on a pay-what-you-want basis.
"I absolutely am not happy that it’s the only way we make artists money right now," Lucchese says. "The purpose of this financing is to build out additional services where we can make artists more money. How can we make it easier for you to convert those [attendees] to fans? How can we help you better monetize them?"
Part of the plan is to increase the number of sponsored Sofar shows, like one they held with 21st Century Fox in conjunction with the release of Bohemian Rhapsody, where he says average compensation is bumped up to $1500 per artist. Currently, the company hosts between 50 and 100 such shows every year. Lucchese also hopes to invest more in the professional performance videos Sofar provides each artist, and the infrastructure that allows some performers to go on multiple-city Sofar tours.
"I want being a Sofar artist to unlock other services for you," he adds. "We’re starting around building that digital front door for artists and making the touring side of things more efficient and easier."
He maintains that Sofar's major value for artists is exposure -- "the ability to change that audience and to grow that audience in a really organic, meaningful way." NYC-based family band BALIEN has played more than 70 Sofar shows, he says, and despite never having released online music until January 2019, are now headed on tour with Hozier (another Sofar alum). Billie Eilish, Bastille and Leon Bridges all played Sofar shows well before breaking big.
"Sofar is safe space where we can even try new songs or fusions and interact with a diverse community," adds Sofar hip-hop performer Toya DeLazy, who has played gigs in London and South Africa, over email. "It really opens up the industry and shows you the magnitude of talent that is out there. It's not often you find a platform that really cares to hear what you have to share, even if it is totally left field."
The rest of the new funds will go toward supporting the global Sofar community -- from hosts to ambassadors, volunteers and fans. "Jim and I are working really closely to make sure that while we put the artists in the center of everything we do, we also make sure that the experience doesn’t change," Offer explains. "It's still that feeling of a great listening audience, a great vibe in the room, the same organic communal feeling that we have now."
The company has tripled its ticket sales in the last 18 months -- on a given night, up to 20 gigs are going on around the world.
"It’s incredibly exciting that we’re still going and making an impact," Offer adds. "With helping more artists and helping them become sustainable, there’s a lot to still be done."