When Rapchat CEO Seth Miller launched his music-making app in 2015, he saw potential to democratize the creation of music. Miller received validation of his success this year when investor interest skyrocketed after Facebook’s internal NPE Team launched BARS, an experimental app that closely resembles the Rapchat mobile music studio and community.
Despite fierce competition from the likes of Facebook and TikTok, Rapchat today announced a new $2.3 million funding round from Sony Music Entertainment and Adjacent venture capital firm. Combined with the startup’s original $1.7 million in seed funding, a total of $4 million in venture capital is now supporting artists working to launch careers in music.
“We’ve always wanted to be the easiest way to make music on your phone, and it’s evolved into aspiring artists making full-length songs on their phones,” Miller says. “It all goes to show how much the markets have evolved … with the rise of the creator economy and different trends now people see the potential for music to be disrupted.”
Rapchat has a distributed team of 10 employees and has attracted more than seven million registered users who create more than 250,000 original audio tracks each month. With additional investors London Venture Partners, M25, TechNexus, Base Ventures and 500 Startups, the platform attracts rap and hip-hop fans who spend an average of 35 minutes daily in the app either creating music as a hobby or to be discovered and make it a career.
Based on a recent Rapchat survey of active users, 57% are aspiring music creators who want to make music a career or side hustle by gaining followers and monetizing their work. A total of 26% consider music a hobby and access the app to improve their music creation skills and 18% are casual music creators seeking entertainment. Exactly half of active users are international based in 160 countries.
Miller explains that Rapchat users create original songs by accessing a catalog of more than 100,000 beats, recording vocals over beats and applying editing tools like voice effects and mastering. Creators are then able to share their work with the Rapchat community or privately with another artist. Publicly, users can share songs across major social media platforms including Instagram and TikTok. They can also use Rapchat’s feedback forums, collaborations and competitions to spur engagement and grow a following.
Nico Wittenborn, lead Investor at Adjacent, said in a statement, “(Rapchat) decreases the friction of creativity by allowing anyone, anywhere in the world to record and publish music straight from their phones. This mobile-enabled democratization of technology is what Adjacent is all about, and I am super excited to support the team in building out this next-level music platform."
With creation and distribution underway, Miller is now investing in engineering and marketing new product features that he says will grow Rapchat into the primary destination for artists to monetize their work. Soon the free app will offer premium subscribers studio-quality tools with which to self-publish and monetize their original content directly on more than 40 different music streaming platforms including Spotify and Apple Music. Monetization will come by way of royalty splits, paid sessions and in-app tipping.
While record labels are traditionally thought of as gate keepers of the music industry, Miller says that corporate VC and innovation inside of labels has evolved greatly, making them ideal strategic investors. He points out complementary business opportunities that exist for labels such as signing and promoting new artists.
“Sony saw the vision, they saw the future of music and what it could be with us creating our own economy,” Miller says. “We’re unlocking and creating a new market for those who deserve it–and bringing transparency to the process.”
According to Miller, there will soon be an increase in prize pools for the platform’s popular “challenges” competition series that bring artists and fans together on the platform. Rapchat will also begin offering users professional mentoring engagements with established artists, producers and industry executives to navigate their careers.
