Los Angeles-headquartered payments and distribution platform Stem has announced plans to deploy a quarter of a billion dollars in artist advances as part of a new partnership with Chicago’s Victory Park Capital.
Eight-year-old Stem formally revealed its tie-up with Victory Park Capital today, roughly 15 months after disclosing a $20 million funding round that drew support from Tidal parent Block, Hybe’s Quality Control, and QED Investors. Having debuted its artist-advance offering back in 2020, Stem is now poised to pay out $250 million to eligible creators, per higher-ups.
The sizable tranche at hand will set the stage for “longer-term strategic and financial planning options,” Stem execs likewise communicated, referring specifically to advances against future music projects as well as past releases.
Moreover, the Milana Lewis-founded company also took the opportunity to underscore that it “provides advances against future projects without taking any ownership” – a model that’s “had a profound impact” on certain indie acts’ careers, according to the business.
And on this front, Stem further pointed to its most noteworthy advances to date, among them a number of transactions with Brooklyn-born artist Justine Skye. “Within 12 months, Justine and her team have taken out five advances, with the most-recent loan taken being a 6x increase from the first in that period,” Stem wrote of its financial arrangement with the ex-major-label act.
Building upon the idea, Milana Lewis, the aforementioned founder and CEO of Stem, emphasized a goal of meeting a perceived market need by providing capital to artists who don’t wish to sell their catalogs as well as those (like Justine Skye) who are exiting major-label deals.
“This funding from VPC enables us to solve two major gaps we see artists consistently facing,” said Lewis, whose company has for about eight months offered a royalty services product to labels. “The first gap is access to capital for those who are not quite yet ready to sell their catalog but want to leverage it for cash. The second is investment in future music for those who are exiting the major label system, have their catalog currently committed, but have the opportunity to become independent for future releases.”
In November, roughly nine months after closing a $34 million seed round, beatBread unveiled “a $100 million institutional funding agreement” with Variant Investments. More recently, the artist-advance startup in April brought on as CFO Troy Skabelund, previously a Walt Disney Company exec.
Also on the artist-advance side, Utopia Music scooped up Lyric Financial (along with several other companies) during 2021. But the former entity has since executed multiple layoff rounds, sold recently acquired divisions including ROSTR and Sentric, and grappled with tax-debt allegations – raising questions about its long-term plans for Lyric.