￼Tradiio enables music creators to generate monthly funding from their fans while reaching new audiences.
- Lisbon, Portugal
Categories: Entertainment Mixed Digital/Non-Digital B2C
- Social Media
- Company number
- Incorporation date
- Investment sought:
- Equity offered:
Tradiio allows music creators to set up a subscription page where their fans can support them on a monthly basis in exchange for access to exclusives, unique rewards and experiences. The platform blends crowdfunding and music streaming with the mission of generating recurring funding for musicians - like the old fan club model, but adapted to the digital space.
Today it’s easier than ever to create and share music, but it’s harder than ever for emerging artists to generate revenue (77% of music industry revenue is generated by 1% of the artists).
This is Isaura.
She spends most of her time writing and producing. After this long process she will release her music on all the major music streaming platforms. Last year, she got more than 200,000 plays on Spotify and 450,000 views on Youtube, but she’s yet to make any significant money from these platforms.
Like Isaura, there are millions of artists who are in the same situation and this the hottest topic in the music industry right now.
Tradiio is changing this.
We are creating an innovative and revolutionary brand that we aim to become the go-to platform for music creators that want to monetise their work digitally. We want to create a middle class of artists that are able to make a living from their art. And it’s already working.
This year, on Tradiio, Isaura made more money than in music streaming, CD sales and radio royalties combined. And Tradiio artists are already engaging with fans in this innovative way.
We now want to bring this opportunity to millions of artists, providing the music industry with a new revenue stream, with fairer payments for music creators.
Substantial accomplishments to date
We've built a beautiful and scalable product, with a base of more than 25,000 artists and over 280,000 users. Our team is young, innovative and share a collective passion for music and tech.
We launched internationally in March 2015 from our UK offices with the mission of enabling music creators to generate revenue from their art. Today, we are partners of industry giants such as Universal Music, Island Records, providing them the best new talent within the music industry.
We’ve been featured by media outlets such as Forbes and CNBC. This year we launched our
subscription feature in beta.
In early 2016 Tradiio was announced as the 10th most disruptive global startup by Disrupt 100 Index.
Tradiio works with the artists to activate their subscription pages and retains a 10% commission on the revenue generated.
After 2018, Tradiio intends to open further revenue streams that we’ve already explored in the past:
Use of proceeds
Investment will be used to continue activation in the UK market, support our US launch and implement our strategy for the coming year. The goal is to activate the model globally with automated acquisition and activate it locally in the UK and US markets to generate awareness.
Our intention is then to seek a new funding round in the end of the next year to scale globally in 2018.
The Company has €775,000 in Unsecured Convertible Loan Notes (plus interest) that would be eligible to convert upon a successful Seedrs fundraise. Conversion of the Loan would lead to dilution of existing shareholders equity holdings in the company. The notes are subject to interest of 6% per annum (from issuance date of 31 August 2015 for a partial amount of €650,000, and from issuance date of 30 November 2015 for the remaining amount of €125,000), accrued monthly. All of the notes Principal and Accrued Interest shall convert in full on the Maturity Date, which is set at the 31st December 2016. The notes will convert at a 25% discount to the prevailing share price upon a "Series A financing". The term “Series A Financing” shall mean the next transaction or series of related transactions in which the Company sells shares of its next preferred stock raising an amount of not less than €600,000 of gross proceeds exclusive of the Notes. This means the Seedrs fundraise will trigger a conversion of the convertible loan.
Please note, the Company has two classes of shares: ordinary shares and Class A Preference Shares. Investors in this round will receive Class A Preference Shares, the key differences to ordinary shares are as follows:
• Class A Preference shares have a liquidation preference equal to 1x the subscription price plus 7% for each year held.
• Class A Preference have a 'participating preference', meaning that after receiving the preference return described above, they also receive a share of any remaining assets or proceeds available for distribution, on a pro rata basis alongside ordinary shares.
• The Company may, after 3 years from subscription, convert the Class A Preference Shares into ordinary shares (at 1 for 1), by paying the Class A Preference Share holders the amount equivalent to the 'preference' at that time (ie 1x the subscription price + 7% for each year held).
• From the 6th anniversary of the subscription, if 50% or more of Class A Preference Share holders agree, and so long as the business is able to operate normally after such payment, Class A Preference Share holders may be given the right to redeem their shares in three equal annual instalments at the greater of the initial subscription price and "fair value" as determined by mutual agreement between the company and Class A preference share holders (or, if the Company and such holders fail to agree, by an appraiser), plus declared and unpaid dividends.
• The Class A Preference Shares enjoy a narrow-based weighted average anti-dilution right in the event that the Company issues equity securities at a pre-money valuation of less than €4,003,216.50. The anti-dilution rights are subject to carve outs for: (i) the employee option pool, (ii) shares issued for non-cash consideration as part of a corporate transaction; (iii) shares issued pursuant to any equipment loan or leasing arrangement, real property leasing arrangement or debt financing from a bank or similar financial institution approved by the Board; and (iv) shares with respect to which the holders of a majority of the outstanding Class A Preferred Stock waive their anti- dilution rights.
Tradiio blends crowdfunding and music, exploring a new category called direct-to-fan which we expect to be an industry standard by 2017. Tradiio aims to be the first international player to scale the model.
Total addressable market is $32 billion euros in the music industry plus $31 billion euros in the crowdfunding space, making a total of 63 billion euros.
Characteristics of target market
Music has a larger share of people's time and attention than ever before - we listen to it everywhere. However, the growth of streaming has meant music has become commodity and its value is at an alltime low.
The music industry is now evolving beyond the streaming, all access paradigm, with a new focus on exclusives, interactive content and direct-to-fan monetization. This shift is empowering artists and we believe that the subscription crowdfunding model will be a new major industry revenue stream.
Now we want to scale our success worldwide, from the UK to the US market, the biggest crowdfunding and music market in the world. We are approaching this goal with two strategies:
Generating awareness in US and UK:
We intend to generate awareness by closing partnerships with influential brands and generating success cases with exciting artists.
Converting long-tail artists worldwide:
And we intend to acquire thousands of long-tail artists (indie, emerging, from small labels), enabling them to digitally generate revenue from their music. This acquisition will be made in an automated and scalable way.
We see Soundcloud as currently the easiest way to share your music and the go-to platform for most emerging artists. It has scale and credibility. But after 9 years and $228M invested they are struggling to monetise and are not generating revenue for artists. They have recently pivoted to become a conventional streaming app.
Patreon is one of the most successful crowdfunding sites, it provides creators with a recurring income. However, they are not a business vertical, with focus spread across all creative industries and not exclusively on music. Also, they are not a streaming platform that enables fans to browse and discover new music.