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Epidemic Sound raises $20M at a $370M valuation

Epidemic Sound, the soundtrack provider behind Youtube, TikTok, Instagram and others  raised $20 million funding or in other terms a $370 million valuation.

For the last few years, the demand for streaming video has seen rising in the market for licensing streamed music. Not only consumers viewing and using video as a medium to listen to tracks but video creators as well extensively use music as part of their own productions.

Its music licensing consumer includes a lot of famous names, from YouTubers and creators on Instagram, TikTok and the rest, to giant agencies and popular premium streaming video destinations like Netflix.

On the musical side, however, this is not yet a place where you can find soundtracks from famous personalities: rather it’s a platform full of anonymous names who are professional jobbing musicians who do that to either include revenue into income until they hit their spotlight, or as an end in itself, with the biggest creators making “tens of thousands of dollars per month” on Epidemic, said the Epidemic’s co-founder and CEO Oscar Hoglund.

Investors in the cycle include Korean firm DS Asset Management and Skandinaviska Enskilda Banken AB (SEB), known to be a Swedish financial group that is providing debt financing. Other investors in Epidemic include Creandum, EQT Mid-Market and Atwater Capital. (Creandum, the Swedish VC firm that recently closed a new fund, notable investor for its portfolio  includes Spotify, Soundtrack Your Brand, which formerly called Spotify for Business, and headphone maker Jays.)

DS Asset Management’s support is somewhat strategic: Epidemic arranges the funding in use to expand into Asia starting at setting up a shop in Korea. This will raise attention to video creation in the region, knowingly that there is a huge popularity for K-Pop and other trends.

“South Korea is the cultural hotspot right now for the region,” he said. “It’s a net exporter for content. Music is consumed and played there, but licensing to creators there means it will travel elsewhere in the region, too.” He added in an interview.

To those who would need a particular kind of music for their soundtracks may go to Epidemic’s search engine and select what they want in classifications of the genre, mood, energy level and/or beats per minute (for faster or slower-paced tunes). Users may listen to each soundtrack and then items selected may be downloaded in just a few clicks. If you use the platform regularly can get more accurate results later on in line to your general taste.

Though Epidemic intentionally collates the mix of music and number of tracks so qualities of the soundtracks will remain consistent, and its algorithm won’t get too overwhelmed and stays accurate in what it provides in search results.

In terms of financing, the music creatives will receive an upfront payment for each track Epidemic buys, payments will then vary depending on the track. The revenue will then be split from music streaming platforms where the music might later alongside its use in the video tracks (Spotify, Apple, Deezer, etc.) 50/50 with musicians.

“The way we see it and our mission is that we are looking for create success all music, both for those who make it and have a need for it,” said Hoglund. “We’re not a marketplace in the sense that YouTube is one, where anyone can upload and consume something. We’re more like Netflix, where we have a more curated and selective approach.” he said, “not the hundreds of thousands.”

Knowingly, there are tons of competitors in the market, such as Muzak, through to platforms providing music themselves (for example YouTube).

By being a platform-agnostic, Epidemic has the option of working with everyone with no strings attached. He even said that at the current state, Epidemic’s music is played for $250 million hours/month on a famous platform, YouTube with numbers two and three Instagram (owned by Facebook) and Facebook itself, that is also now on TikTok. While premium accounts customers will be less creative users of Epidemic, they bring in much larger revenues per user typically.