Artist services platform Stem has secured $10 million in fresh funding, at a time when the company’s mission of accelerating musicians’ access to capital matters more than ever.
The funding round includes new investors Quality Control co-founder/COO Kevin “Coach K” Lee; various individual managers under Red Light Management; and two-time NBA All-Star Baron Davis; along with previous backer Mark Gillespie, the CEO of Three Six Zero and manager to Calvin Harris. The announcement comes as Stem reaches a new milestone: As of this month, it has paid out $100 million in royalties to artists since its founding in 2015.
“Stem was created to provide independent artists with the ability to manage and grow their careers and teams autonomously,” Stem CEO Milana Rabkin Lewis said. “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.”
Added Lee: “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.”
The new funding brings the company’s total raised since 2015 to $22 million. Previous investors have included songwriter-producer Savan Kotecha and entertainment lawyer Dina LaPolt. “Advocating for a fair business for creators in the music industry is central to my mission with Three Six Zero and so investing in Stem is an important extension of this commitment,” added Gillespie.
Rabkin Lewis, a former digital media agent at United Talent Agency and Billboard Women In Music honoree, co-founded the company to empower artists to manage, distribute and finance their businesses outside of the typical major-label system. The company provides advances in the form of a revolving credit line, with the ultimate draw limit and fee based on the artists’ net share of income. Unlike typical industry advances, Stem allows artists to decide which percentage of earnings they contribute to paying off the advance each month, rather than sending all their earnings for recoupment. Earlier this year, Stem launched a financing product, Scale, which will enable Stem to deploy over $100m in advances to both its independent artist and record label clients.
The growing list of artists who have used the platform includes Zac Brown Band, Foster the People, Jeezy, Desiigner, Toro y Moi, and Frank Ocean, who used it to distribute 2016’s Blonde, along with independent labels like Big Loud Records.