Spotify-backed startup raises $22 million for B2B streaming

Sweden-based startup Soundtrack Your Brand has raised US$22 million in funding to provide businesses with a modern platform for curating and playing licensed music in public.

The investment round was led by Balderton Capital and Stockholm-based Industrifonden, along with previous funders Telia Company, Northzone, Creandum, H&M’s HMP and Jörg Mohaupt.

Known as Spotify Business in the Nordics, Spotify was a seed investor in Soundtrack Your Brand which was set up in 2013 by Beats Music co-founder Ola Sars and ex-Spotify executive Andreas Liffgarden.

Sars and Liffgarden made a striking realisation that many cafes, gyms and other retail businesses relied solely on CDs to provide in-store music for customers. With businesses regularly failing to report on what music they play, this ultimately deprives royalties for both rights holders and artists.

The streaming service built by the duo manages licenses for businesses, while allowing them to control music across multiple stores and locations. Over the last year, revenue grew by 400% as Soundtrack Your Brand sets it eyes on expansion to the US, as well as Europe and the Asia-Pacific region.

While the founders see the consumer streaming market as a crowded market with a number of high-profile competitors, B2B music streaming is an untapped market with potential for profit and growth.

Unlike consumer streaming services, it’s licensed to use in public and commercial environments and combines data analysis with hands-on expertise to deliver content that fits individual brands and boosts sales.

“Background music today is sold as a utility, and there’s rarely much thought going into what music brands are playing and why,” said Liffgarden.

He added: “Today’s background music sucks for brands and consumers alike, and it’s hurting the music industry at large. As lovers of music and technology, we’re completely overhauling this industry, to once and for all kill bad background music.”

“While our competitors are focused on shipping CDs by mail to large chains in US and Europe, we are growing the size of this market by digital means,” said Sars. “We distribute our platform more efficiently and are continually improving the product experience.”

Currently, there are 65 employees working for the startup, mostly comprising engineers in Stockholm, plus sales teams in London and Seattle.