Based between Stockholm and Los Angeles, MasterExchange announced that it has raised €2.5 million in funding from global investors including Vectr Fintech, Claes-Henrik Julander, and Rob Small. The MasterExchange platform enables anyone to invest fiat currency in specific songs and receive quarterly royalty payments, as well as trade their shares of music royalties.
The company was co-founded in Stockholm in 2022 by, amongst others, AI and blockchain expert Alexander Fred-Ojala, Star Stable founder Johan Edfeldt, and Billboard #1 producer Jakke Erixson. It is initially available to customers in the UK, the EU, and EEA countries.
Alexander Fred-Ojala, CEO and Co-Founder of MasterExchange, commented: “This innovation allows music lovers to find unique and exciting new ways to connect with the music they love, whilst allowing the industry new, easy-to-use channels to create super-fans. For the creators, MasterExchange offers the opportunity to sell a part of future revenues, giving them more possibilities to fuel artistic creation. MasterExchange is well-positioned to drive this change with a team that has frontier tech expertise, deep roots in the music industry, and company-building experience. I am super proud to lead this effort and this amazing group of people!
How does it work? A song is made available for investment through an Initial Music Offering (IMO). An IMO can be launched by any master royalty beneficiary (typically, these are artists, music labels, or producers). This allows users to purchase shares of song royalties that will entitle them to income generated from use, e.g. via streaming services or if a song is featured in a commercial, movie, or TV series. Transparent information about each investment opportunity is provided on the platform for users to review before making a purchase.
Anyone owning royalty shares on MasterExchange receives quarterly royalty payments based on the number of shares that they hold and the percentage of the royalty claims that they own. The first song to be made available to invest in, Sofia (1 billionn+ streams) by Alvaro Soler, is available to purchase now. The investment window will close on the 15th of August, with more songs set to be announced soon.
Co-Founder and Chairman of the Board Johan Edfeldt, added: “The investors we have onboard are not your everyday angels. This group brings a profound knowledge of B2C plays (Rob, founder of Miniclip), sophisticated investment tools (Claes-Henrik, founder of Pan Capital) as well as the B2B2C VC perspective from Vectr Fintech (a San Francisco/Hong Kong-based investment fund). We are proud and happy to have them onboard”.
Jason Best, Managing Partner at Vectr Fintech, concluded: “We invested in MasterExchange because their experienced and execution-focused team has delivered the easiest user experience for artists, fans and music industry professionals. Their fiat currency-based model enables artists the best way to provide investment opportunities to their fans. The industry stakeholder alignment they have achieved can enable their platform to scale rapidly and efficiently. We believe that MasterExchange is capable of unlocking billions of euros of music investment value.”
MasterExchange has put in tremendous efforts to make the service a safe, easy-to-understand and compliant marketplace. All participating parties will go through safety checks to ensure they meet the eligibility and compliance criteria in terms of age, country of residence etc. Payments are made in Euros using regular credit or debit cards and all money is kept safe by our regulated payment provider and custody partner.